________________________________________________________________________________________________________________________
The energy market turmoil raised concerns in Europe about the security of supply of commodities that were once considered readily available . Natural-gas and power shortages became a serious threat to business continuation , and governments began to consider energy curtailment plans , prioritizing certain segments of demand . The possibility of shortages has mostly subsided , but a recent report on system adequacy from the European Network of Transmission System Operators for Electricity ( ENTSO-E ) identified significant potential power shortages in many European countries in 2025 to 2030 . The report partly attributes these shortages to the phase-out of thermal generation . Regardless of the reason , security of supply and higher prices could remain significant issues for industrial companies .
Many European industrial companies have already begun addressing short- and long-term energy challenges . Some are considering moving production sites to locations with less expensive energy costs , with abundant renewable resources , or without a price on CO 2 emissions . Others have signed PPAs from energy producers , invested in energy efficiency measures , and pursued renewable energy production and sourcing opportunities .
Below , we examine four ways industrial companies can address these challenges . They vary by the amount of capital spending required to carry them out , how long it might take to execute them , and the capabilities needed to maximize their value .
Captive on-site or offsite power generation
On-site or off-site power generation , especially renewables , can be one of the most powerful ways to achieve reliable and relatively inexpensive electricity . In particular , the considerable drop in the price of solar
Exhibit 2 : Energy from renewable sources has significantly dropped in price since 2010 , making it an attractive option for industrial companies .
30