AleaSoft Energy Forecasting, May 30, 2025. In the current decarbonisation process, electro‑intensive industries and large energy consumers face the dual challenge of reducing emissions and maintaining their competitiveness. Electrification, the strategic use of price forecasts, PPA contracts, battery storage, self‑consumption and flexible demand management are consolidated as key elements to optimise costs, minimise risks and move towards a more sustainable industrial model.
The fight against climate change is structurally transforming the way energy is produced and consumed. Electro‑intensive industries, such as steel, chemicals, industrial gases, non‑ferrous metallurgy, cement, data centres, textiles or paper, along with other large consumers such as logistics operators or multi‑sector industrial plants, are at the heart of this transformation.
These companies are not only called upon to reduce their emissions to meet climate targets but also face increasing pressure to ensure their competitiveness in a global market. In this context, the cost of electricity and security of supply have become strategic factors.
This is the first in a series of articles dedicated to the different profiles of actors in the energy sector. Each delivery will address the challenges and opportunities faced by a specific group within the sector, as well as the strategies and tools that enable progress towards a more sustainable and competitive model. On this occasion, the analysis focuses on industry and large energy consumers, key players in the process of decarbonisation and modernisation of the energy system.
Electrification and increasing electricity consumption: an irreversible change
Electrification of industrial processes is the most direct and feasible path to decarbonisation. Whether by replacing gas boilers with heat pumps, electrifying furnaces, thermal processes or internal transport, or by integrating energy storage and self‑consumption systems, the trend is clear: industrial electricity consumption will grow significantly in the coming years.
This increase in electricity demand poses major challenges. Among them is the need to guarantee the availability of energy at all times and at competitive prices. Furthermore, this increase in demand entails greater exposure to the growing volatility of electricity market prices, a situation that is accentuated by the high penetration of renewable energy, the occurrence of extreme weather events, geopolitical tensions and changes in the regulatory framework.
Against this backdrop, energy planning based on hourly price forecasts becomes an indispensable tool.
Anticipation for strategic decisions
Short‑, mid‑ and long‑term electricity market price forecasts allow industries to make informed decisions and anticipate changes in the energy environment. Each time horizon provides specific value. In the short term, ranging from a few days to several weeks, forecasts are essential for operational planning, load management, participation in day‑ahead, intraday and ancillary service markets, as well as for optimising the use of batteries or self‑consumption systems. In the medium term, which ranges from months to several years, they are particularly useful for hedging, maintenance planning, advanced purchases and adapting to seasonal variations or regulatory changes. Lastly, long‑term forecasts, which extend over several years, are essential for evaluating industrial investments, formalising PPA (Power Purchase Agreement) contracts, sizing energy efficiency projects or justifying electrification and energy storage projects to financial partners.
Forecasts also allow for simulating future scenarios, assessing risk exposure and establishing robust hedging strategies against extreme or negative prices.
PPA: stable price and long‑term visibility
In an environment of uncertain prices, PPA have become a key solution for industries seeking to reduce their market exposure and obtain renewable energy at competitive prices. A well‑structured PPA provides long‑term visibility of energy costs, ensures the direct supply of renewable energy, which contributes to meeting ESG (Environmental, Social and Governance) objectives, and improves the company’s energy risk profile to financiers and shareholders.
However, in order to be able to sign a long‑term PPA on favourable terms, it is essential to have robust price forecasts that allow the contract to be negotiated based on realistic scenarios and to assess its economic impact on the industrial operation as a whole.
Currently, PPA prices are very low, which represents an opportunity for industries and large consumers to close long‑term contracts at advantageous conditions. Since its first webinar in December 2019, AleaSoft Energy Forecasting has advocated an energy strategy based on diversification as the most effective way to mitigate price risk. This strategy combines the contracting of PPA to secure part of the energy supply in the long term, with the possibility of additional hedging in the futures markets. Self‑consumption is also seen as an effective tool for reducing exposure to the market, a strategy that is becoming more attractive with the progressive reduction in the cost of batteries, which allow surpluses to be stored for later use. Added to all this is the option of acquiring part of the energy directly on the wholesale market, taking advantage of moments of low or even negative prices. This combination of instruments makes it possible to build a flexible and resilient purchasing strategy adapted to the new challenges of the electricity system.
Source: Prepared by AleaSoft Energy Forecasting.Batteries: flexibility, savings and system services
The integration of energy storage systems using batteries offers multiple benefits for large electricity consumers. These include direct savings by allowing the storage of surpluses and energy in low‑price hours for use at times of high prices. In addition, it facilitates active participation in the energy and ancillary services markets, generating additional revenues. It also contributes to improving operational stability by reducing consumption peaks, optimising demand management and acting as a backup in the event of electricity grid failures.
In addition, batteries make it possible to optimise PPA or self‑consumption, maximising the use of available renewable energy and reducing deviations.
The deployment of batteries is favoured by advances in technology, lower costs and new regulations that allow their participation in various markets. In this sense, capacity mechanisms, public aid or changes in the regulations on hybridisation and grid access are creating an increasingly favourable environment.
Flexible demand: a strategic resource in ancillary services
In addition to batteries, another key resource that the electro‑intensive industries can bring to the electricity system is demand flexibility. This ability to temporarily adapt their electricity consumption, in a voluntary and coordinated manner, allows these industries to participate in the markets for ancillary services by offering load reduction or shifting at critical times. It also allows them to benefit from demand response mechanisms, which will be increasingly necessary in a system dominated by intermittent renewable sources. At the same time, this flexibility contributes to improving operational efficiency by adapting certain industrial processes to market signals, such as low prices or services required by the system operator, and reinforces grid stability by helping to avoid bottlenecks and supporting the balance between supply and demand.
Regulatory developments in Europe are moving towards a greater opening of markets to aggregated and manageable demand, allowing even industrial loads, grouped through aggregators or control centres, to compete on equal terms with generation units in the provision of services.
The digitalisation and real‑time monitoring of consumption, together with hourly forecasting and optimisation tools, make it possible to identify when and how to make demand more flexible without affecting productivity. This ability to act as a “flexible prosumer” will be a differentiating element in the energy strategy of the industries of the future.
Plan today to compete tomorrow
The decarbonisation of large electricity consumers must be addressed through a solid and well‑founded energy strategy. The combination of price forecasts at all time horizons, the analysis and contracting of renewable PPA and the adoption of storage and demand flexibility solutions is the most effective way to reduce costs, minimise risks and move towards a sustainable industrial model.
AleaSoft Energy Forecasting accompanies industries in this transition with energy market forecasts, feasibility studies and simulations of future battery operation, because in the new electricity paradigm, the best decision is the one taken with a vision of the future.
AleaSoft Energy Forecasting’s analysis for battery systems
AleaSoft Energy Forecasting produces reports for large consumers to size and optimise projects of hybridisation with batteries. These studies cover various configurations, such as self‑consumption systems with batteries, cogeneration with batteries and battery‑backed demand management.
Source: AleaSoft Energy Forecasting.
