WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 49
GLOBAL
OUTLOOK
Wind, solar, and nuclear energy are all struggling to attract
investment. Because of this, government intervention is
often necessary. For example, the UK's RAB model for
nuclear and CfD for offshore wind are examples of such
interventions. Major oil and gas companies see renewables
as costs rather than value-generating assets.
2. Renewable energy is less profitable than oil and gas.
However, fossil fuels are still subsidized in many parts of
the world.
Florent
Andrillon
Global Climate Tech
Leader, Vice President
Capgemini
Florent leads the strategy
and development of climate
technologies services
globally for Capgemini
group. He focuses on
innovation, partnerships and
helping climate tech players
scale their solutions, reduce
time to market, and optimize
profitability.
Rémi Dachicourt
Renewables &
Decarbonized Power
Generation Leader
Director - Capgemini
Engineering
Rémi leads renewable energy
services for Capgemini
Engineering. His past experience
includes both technical and
consulting projects, supporting
his customers transitioning away
from fossil fuels by achieving
a profitable growth of the
renewable power generation.
3. Companies need to change how this business is viewed,
managing it as an asset.
4. Diversification of client base – need a risk portfolio, some
assets traded on market, some in PPAs, some for storage
Introduction
The last decade has seen a surge of renewable capacity as
the industry has experienced remarkable growth spurred
by increasing environmental concerns and technological
advancements. Global renewable capacity increased 12% in
2023, driven by solar PV and wind.
A recent International Renewable Energy Agency (IRENA) report
showed that almost two-thirds of renewable power added in
2022 had lower costs than the cheapest coal-fired options in
G20 countries, despite cost inflation.
However, despite the growth in capacity and generation, the
sector continues to suffer from relatively low profits compared
to traditional power generation, like coal or gas-fired plants.
Cost reductions, particularly in solar PV, and efficient engineering
and supply chains are crucial for improving margins. Government
policies, such as the U.S. Inflation Reduction Act, provide vital
support, but regulatory challenges persist, especially in Europe.
Diversification, including renewable hydrogen and energy
storage, offers new revenue streams. Additionally, addressing
challenges like negative power prices through energy storage
and grid modernization is essential.
Ultimately, most successful renewables players activate various
strategies to enhance profitability, emphasizing the importance
of operational excellence, policy support, well-executed
financial discipline and innovation, particularly in the context
of increasing negative power price periods due to over capacity.
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