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A look at +20 years of energy transition shows:

The higher the share of renewable energy, the more change in market design is needed.

We observe new lead markets are emerging at fast pace, old markets are transforming. Not only because politics is putting pressure on it and creating incentives, but also because business is driving this forward. The sustainable energy transition offers a world full of opportunities.

Lead Markets of the Energy Transition

If we look at the value chain of the energy transition across industries, we see three sectors in which renewables energy lead markets are emerging. To promote strategic discussions on how to leverage digital capabilities we have created a lead market map for 3 areas of the energy transition. A key question is, in which of these areas do you engage?

  1. Re-imagine Energy Business

Cheap and green wind and solar energy are the basis of tomorrow's energy business. Who will win is open - the race for innovative business models that connect consumers, and the energy market is on, perhaps more intensely than ever before. Today everyone can become a market participant and benefit. Digital business models in combination with a mindset shift towards community thinking show great potential to orchestrate distributed energy resources in a customer centric approach. It is likely that these business models are disruptive. Four trends are obvious:

DIGITALIZATION - Digital business models on the rise.
In a world of everything is connected data management drives intelligent networks.

COMMUNITIES - Existing business models are disrupted by collaborative and shared energy systems.

COLLECTIVE VIRTUAL POWER PLANTS - Aggregators of production and consumption facilities are leveraging cost benefits through network services.

NETWORK STABILIZATION - Remaining large generation facilities will
benefit from high margin to provide system stabilization services.

  1. Re-build the infrastructure

The transformation of the energy infrastructure requires countless solar and wind energy plants as well as numerous storage facilities. To manufacture these distributed energy assets raw materials are wanted. The value chain for integrating renewable energy resources into the system ranges from the extraction or recycling of raw materials to the processing of materials, to the production and installation of the assets. In our map we consider four infrastructure lead areas:

POWER GENERATION - Central power plants fueled by fossil oil, gas, coal are being replaced by renewables energy production.

POWER STORAGE AND SUPPLY - Fossil storages are replaced by power storages generated with renewable energy.

TRANSPORTATION - Major power lines are being built. Gas pipelines, LNG and oil supply chains are being transformed to transport power storages generated by renewable energy.

DECARBONIZATION OF ENERGY CONSUMPTION - The electrification of fossil systems offers tremendous potential for decarbonization.

  1. Do it Sustainably

The trend toward sustainability is a real game changer - it is changing the way we work. The idea of a circular economy is still in the early stages of implementation. In times when raw materials are hard to come by, the circular economy is becoming increasingly important. It promotes new business models and reduces environmental impact.

Regulations are increasingly forcing companies to visualize and reduce environmental impacts across the value chain. Circular economy only works in a network of all participating players - seamless cooperation across company and industry boundaries is indispensable. Our lead market map consists of:

PLAN TO OPERATE - Raw material scarcity and sustainability require circular thinking from cradle to cradle.

SECOND LIFE AND RECYCLING - At the end of the lifetime next life begins. Refurbishment and recycling processes need to be integrated in the lifecycle design.

BE TRANSPARENT - Understanding the environmental footprint
of your product becomes more and more critical for economic success.

USING GREEN ENERGY MORE EFFICIENTLY - With the rise of green energy, the definition of energy management is changing. Efficiency today also means to manage when to use the available energy.


As SAP we support all relevant industries that contribute to the energy transition. In our strategic initiative energy transition better faster we make use of the comprehensive knowledge to connect the dots and help our customers successfully transform and benefit from the energy transition. No matter what's the individual starting point.

Renewables energy lead market map


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