The energy sector is facing a new period of structural change which will see an arrest to the movement towards vertical integrated energy suppliers as regulation aims to open up the European supply market and allow for the separation of production and supply.
The EU’s ‘third energy package’ aims to ensure a single energy market and the unbundling of transmission and production. As EU members transpose the new rules into national legislation for 2014, a truly integrated European market will be achieved.
Cross-border energy trade and the integration of national energy markets will accelerate as regulatory gaps are being filled and the powers of national regulators levelled since the inauguration of the Agency for the Co-operation of Energy Regulators in March 2011.
The ‘ownership unbundling’ of transmission assets intended to ensure non-discriminatory access to pipes and wires and efficient investment in infrastructure will reduce the competitive advantage of the incumbent providers and encourage competition.
The net effect of the European market reforms will allow power to flow freely and cheaply from those who produce it and have surpluses to those who don‘t, and allow renewable energy to be generated where it is most efficient.
Reform of the market and the grid offers energy companies new territories, as well as new sources of revenue; although the liberalisation of the markets may paradoxically lead to a decrease in plurality of European suppliers via consolidation.
The introduction of smart grid and distributed generation and storage technologies will transform the network, and require new technology partnerships for the industry as the smart grid and micro-generation technologies/developments allow power and information to move in multiple directions.
These changes will also enable a host of new participants and business models – introducing strong competition for existing revenue streams.
With the changes in regulation opening up opportunities for growth through cross-border supply, coupled with new product and service areas and the growth of interest in power generation (specifically clean energy), the relationship between supplier and consumer is adapting to a more frequent interaction, a relationship deeper than just billing and payment.
Where then is the relevance of sponsorship?
Just as a website is always, ultimately, an online reflection of an organisation, major sponsorships are – for better or worse – the real-world equivalent.
The choices major sponsorships impose inevitably touch on structure, on value proposition, on customer relationship, on brand, on performance – on every aspect of organisational behaviour.
Our sector paper on the European Energy Sector and Sponsorship therefore considers the opportunities and challenges facing the industry – and the role that sponsorship might play in reflecting a response to these.
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