AleaSoft Energy Forecasting, June 20, 2025. The transformation of the electricity system has blurred the boundaries between traditional utilities and IPP. In an environment marked by electrification, price volatility and increasing renewable energy penetration, both players are converging on strategies that combine investment in energy storage, digitalisation and collaboration. Forecasts of prices, demand and renewable energy generation have become a common strategic tool, essential for investment decision‑making, operation and short-, mid- and long‑term planning.
The energy transition has redrawn the boundaries between traditional large utilities and independent power producers (IPP). While utilities are strengthening their investments in renewable energy, energy storage and digitalisation, IPP are gaining prominence with flexible projects and innovative models. In this scenario of high uncertainty, price, demand and renewable energy generation forecasts become key tools for both.
From centralised generation to decentralised competition
Utilities continue to play a decisive role in the electricity system, especially in the grid operation, the management of large client portfolios and the large‑scale project financing. However, IPP have emerged strongly, taking advantage of their flexibility, their specialisation in renewable energy and their agility to adapt to market opportunities.
IPP have demonstrated that it is possible to develop, build and operate renewable assets without the need for legacy infrastructure and distribution grids. In many cases, IPP manage to sign PPA (Power Purchase Agreements) with large consumers, investment funds or even with utilities, generating complementary and sometimes cooperative business models.
Collaboration as the new normality
Rather than direct confrontation, the market is moving towards hybrid models of collaboration. Utilities, aware of their slower speed of execution in some segments, are collaborating with IPP as co‑investors, offtakers or technical managers.
The emergence of marketplaces in the energy sector, such as AleaHub, is also facilitating new ways of connecting developers, energy buyers, funds and market players, which is accelerating the professionalisation of the sector and shortening financing and commercialisation cycles.
The strategic importance of forecasting
In an increasingly volatile environment, marked by intermittent renewable energy generation, geopolitical tensions and technological developments, both utilities and IPP face a common challenge: making strategic decisions based on reliable forecasts of prices, demand and renewable energy production.
Decisions on investment, operation, PPA contracting or sizing of storage systems increasingly depend on prospective analyses that address different time horizons, from the short term, focused on optimising operations by means of hourly price forecasts in the day‑ahead and intraday markets and ancillary services, through the medium term, where forecasts make it possible to assess future revenues, define hedging strategies, as well as plan and sign PPA contracts, to the long term, which requires studying the financial viability of projects over 20 or 30 years, based on market price curves, analysis of the evolution of demand and renewable energy penetration, as well as their impact on volatility and price cannibalisation.
Robust and coherent forecasts over all these horizons are essential to reduce risks, attract financing, maximise revenues and avoid strategic mistakes. Here, tools such as those provided by the AleaBlue and AleaGreen divisions and other specialised services from AleaSoft Energy Forecasting have been essential to major sector players for more than 20 years.
The key role of storage
Batteries are becoming the third pillar of the new electricity system, alongside renewable energy and flexibility. Both IPP and utilities are investing in storage projects, whether stand‑alone or hybridised, with the aim of maximising revenues through hourly arbitrage and the provision of services in ancillary and capacity markets, increasing the bankability of renewable energy projects by reducing price risk and improving revenue stability, as well as contributing to the stability of the electricity system by facilitating the management of demand peaks, congestion and imbalances in the grid.
To properly assess the profitability of these projects, simulations must consider not only the expected revenues, but also the degradation and replacement of batteries, as well as their operating profile.
Conclusion: a developing sector
The division between utilities and IPP is blurring. Both models are evolving towards more open, dynamic and technological structures, where distributed generation, storage and advanced energy markets, with quarter‑hourly signals, capacity and flexibility services, will be the new playing field.
In this ecosystem, anticipation based on reliable forecasts will be a decisive competitive advantage, and companies that know how to interpret and use this information strategically will lead the energy transition.
Comprehensive view of the electricity sector
The experience of AleaSoft Energy Forecasting in the electricity sector covers a wide range of services, enabling them to provide solutions tailored to the specific challenges of each client group. In addition to working with utilities and IPP, the company works closely with large industrial consumers, retailers, control centres, system operators (TSO), traders, developers, investment funds and financial institutions. It also advises key players in the development of renewable fuels such as green hydrogen, methanol, ammonia and biofuels. This comprehensive view of the market allows AleaSoft Energy Forecasting to anticipate trends, identify opportunities and provide forecasting and analysis tools aligned with the needs of each client in the current context of energy transformation.
Source: AleaSoft Energy Forecasting.
