Colombus Consulting has published the 10th edition of our annual study on the financial health of European electricity producers, with a specific focus on Switzerland.
In 2024, the performance of players such as Alpiq illustrates the complexity of a sector undergoing major restructuring: despite falling wholesale prices and rising investment costs, the company has maintained solid operational performance thanks to the flexibility of its hydroelectric, nuclear and gas-fired power plants. However, this resilience masks growing structural tension across the market as a whole.
The year 2024 is marked by a gradual return to more reasonable prices on European electricity markets.
At European level, electricity producers saw their results decline after two exceptional years. The main reason for this is the fall in wholesale prices, which have returned to pre-crisis levels, driven by two phenomena:
- The increase in renewable production capacity;
- The decline in overall demand for electricity.
Producers keen to roll out new models
The economic model based exclusively on revenues indexed to wholesale markets is reaching its limits. Faced with persistent volatility, energy companies are shifting their strategy towards a hybrid model: part of their revenues remain exposed to the markets through the valuation of flexibility and price/volume arbitrage, while the other part is based on secure long-term contracts, such as PPAs (Power Purchase Agreements), CfDs (Contracts for Difference) or capacity mechanisms.
Swiss energy transition under pressure
In Switzerland, the consumption curve is not reversing. Electricity consumption rose by 1.4% in 2024, driven by economic recovery and the electrification of uses, while domestic production stagnated. Each winter, up to 40% of the electricity consumed may be imported. This imbalance makes the Confederation vulnerable to European tensions and raises the question of control over its energy transition.
As highlighted in the study, the acceleration of renewable projects and the flexibility of the grid will be crucial to ensuring the country’s security of supply.
‘The great electrical shift is not just an energy revolution: it is a test of political and economic maturity for the country,’ comments Jean Meneveau, associate director at Colombus Consulting.
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