PUBLISHED DATE: 2025-08-13 18:09:01

Transition to Green Power: Challenges & Required Capabilities

Table of Contents

Introduction

Green Power is leading the energy transition. The share of electricity generation from fossil fuels, renewables, and nuclear energy has shifted significantly over the past decades. Fossil fuels, while still dominant, have seen a gradual decline, while renewables have steadily increased, surpassing nuclear energy. This trend is expected to continue, with renewables providing a record share of global power and fossil fuel generation falling for the first time outside of a recession.

Renewable electricity capacity additions by technology and segment from 2016 to 2028 show steady growth, with Solar PV and Wind making up the largest portions. The percentage of wind and PV remains high, above 80% in recent years and projected years.

Notable developments include: 2023’s electricity is cleaner than ever, with renewables providing a record share of global power.

Green Power Ecosystem

The transition to renewable energy sources is driving changes in consumer demand and shifting the generation mix. The ecosystem includes: Micro-generation by consumers adds complexity to day balancing of excess generation.

Shift in Generation Mix

The power sector is undergoing a significant transformation towards a diverse mix of dispatchable (traditional) and non-dispatchable (renewable) energy sources. This evolution is reinforced by the growing use of emission reduction certificates, verifying the integration of green energy into the grid. Advanced renewable energy storage solutions, such as Battery Energy Storage Systems (BESS), are progressing to offer enhanced flexibility in managing supply and demand fluctuations. There is also an increasing trend towards utilizing weather derivatives to minimize financial risks from adverse weather conditions.

Overall, the industry is shifting towards a more varied and sustainable energy landscape, driven by technological advancements, regulatory changes, and a growing emphasis on environmental considerations in power generation and distribution.

Shift in Consumer Behaviour

Consumers are increasingly becoming prosumers, contributing surplus power to the grid during peak generation hours. This shift, driven by an abundance of renewable energy on warm days, leads to lower intra-day electricity prices, departing from traditional peak price bands.

Growing consumer awareness is fueling demand for green energy from electricity suppliers, especially among corporate consumers. The adoption of Corporate Power Purchase Agreements (CPPAs) for procuring green energy is rising, as organizations of all sizes use them to meet decarbonization goals. This evolving landscape underscores the importance of sustainability and environmental stewardship in power consumption practices.

The energy transition has affected how power producers, grid operators, wholesalers, and retailers operate, introducing more actors and influencers into the ecosystem.

Actors in the Green Power Ecosystem

Role of Wholesale Supplier

A wholesale power company (supply & trading) sits at the junction of generator, grid operator, market, and consumers to: Green power is not produced as baseload; its production profile fluctuates due to seasonality and time of day. Power companies are exposed to volume and price risk associated with green power and Guarantees of Origin (GoOs). The rapid increase in the share of renewables in the portfolio poses several challenges in managing the green power portfolio.

Wholesale power companies typically have long-term power purchase agreements (PPAs) to provide the route-to-market (RTM) for power produced from renewable assets. They also manage GoOs certificates in the green power portfolio.

Objectives & Challenges for Wholesale Suppliers

Managing a green power portfolio typically involves three key objectives: The rise in distributed generation and rapid growth of new green assets will significantly impact the green-growth ambitions of power wholesale suppliers, necessitating the development of enhanced or new capabilities.

Key problems to solve include:

Capabilities to Support Growth in Green Power for Wholesale Suppliers

Key business capabilities required include: Examples of specific capabilities: Legend:

How Can We Partner with You in Your Energy Transition?

At Publicis Sapient, we have decades of experience working with clients and partners to identify and unlock capabilities that deliver business value. We leverage our unique combination of SPEED capabilities to support our clients’ green growth agenda. Our four-step approach to identifying and addressing problems includes:
  1. Business Strategy and Model
    • Which market areas and instruments are steps in the right direction?
    • How to set up renewable assets and associated contracts?
    • Which processes need to be adjusted or defined to speed up onboarding of new contracts?
  2. Assess & Build Capability
    • What are the pain points in current risk & valuation methods?
    • What are the gaps in functionality hindering intra-day trading and optimization?
    • How can you get better forecasts for generation and consumer demand profiles?
  3. Build Data and Tech Foundation
    • How can we better integrate near-real-time data feeds from various sources?
    • What integration technology stack can solve current problems and scale to future data load?
    • What additional systems/tools are required to support decision makers?
  4. Combine CX with AI Capability
    • How can we simplify the complexity in multiple data series & signals for human users?
    • How can we get users to focus on decision making and automate the resulting actions?
    • How can we reduce time-to-market for new enhancements, products, and solutions?

Case Study

The Imperative for Change

Our client acquired a significant wind and solar power generation portfolio through an asset swap with another global energy company. The commercial asset optimization activities of the acquired assets were managed by three separate regional groups, despite the client’s legacy global sales & trading capability.

The client hired Publicis Sapient to integrate the Commercial Optimization activities into the global Supply & Trading business, building a scalable business platform with systems and processes capable of supporting a doubling of the portfolio this decade—a 70% increase over previous growth plans.

The Transformative Solution

Publicis Sapient developed a Target Operating Model (TOM) for the integrated entity. While specifics of the renewable business were accommodated, standardization of systems and processes across the business was a priority to accelerate implementation. A target architecture, aligned with the TOM and leveraging existing architecture, was also designed.

We also developed a data migration strategy to support the move across new systems and enable more efficient business processes. A detailed roadmap was created, prioritizing regions and business functions and incorporating constraints dictated by other corporate initiatives.

Reference Business Model

The reference business model is organized into several sections: Business Impact:

Reference Architecture

The reference architecture includes:

Technical Approach

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About Publicis Sapient

Publicis Sapient is a digital business transformation company. We partner with global organizations to help them create and sustain a competitive advantage in a world that is increasingly digital. We operate through our expert SPEED capabilities: Strategy and Consulting, Product, Experience, Engineering, and Data. Combined with our culture of curiosity and deep industry knowledge, this enables us to deliver meaningful impact to our clients’ businesses by reimagining the products and experiences their customers truly value. Our agile, data-driven approach equips our clients’ businesses for change, making digital the core of how they think and what they do. Publicis Sapient is the digital business transformation hub of Publicis Groupe, with 20,000 people and over 50 offices worldwide. For more information, visit publicissapient.com.