Utilities

<h2 style="text-align: justify;"><span style="font-size: 12pt;">Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?</span></h2><p style="text-align: justify;">My name is David Gomez, and I have over 15 years of experience in the energy, technology, and sustainability sectors, where I&rsquo;ve specialized in driving technological innovation and sustainable business practices. My professional journey began with a solid foundation in engineering, and over the years, I&rsquo;ve expanded into areas such as renewable Energy, SaaS, and Artificial Intelligence (AI).</p><p style="text-align: justify;">Currently, I work as the European Director for a software company that uses AI to improve the performance of renewable assets. Additionally, I am a teaching assistant for MIT Professional Education, contributing to courses that explore technological changes required to meet global sustainability goals.</p><p style="text-align: justify;">I have also worked extensively on digital solutions for energy efficiency, including developing software that helps businesses optimize their energy use and improve decision-making through advanced data analytics. My expertise spans across the deployment of renewables, the role of AI in energy optimization, and the business side of clean technologies, including the expansion of startups in the SaaS space.</p><p style="text-align: justify;">With a deep understanding of both the technical and business sides of clean Energy, I aim to contribute to sustainable growth through cutting-edge technology and innovative strategies.</p><p style="text-align: justify;">My personal webpage is https://energyoutofthebox.com/, where I host a blog about technology, business, and sustainability.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">Q2. Suggest some strategies undertaken by businesses in EU to implement sustainability.</span></h2><p style="text-align: justify;">Businesses in the European Union are taking proactive steps to embed sustainability into their operations, driven not only by market demand but also by stringent EU legislation that mandates sustainability. The EU has some of the most comprehensive environmental regulations globally, including the European Green Deal, which seeks to make Europe the first climate-neutral continent by 2050. This ambitious goal is supported by regulations such as the EU Emissions Trading System (EU ETS), which caps carbon emissions for high-polluting industries, incentivizing businesses to reduce their carbon footprints or face penalties.</p><p style="text-align: justify;">One widely adopted strategy in response to these regulations is the shift toward circular economy models. Instead of traditional linear processes (produce, use, dispose), businesses are embracing circular practices that focus on reducing waste and enhancing resource efficiency. For example, firms are increasingly adopting product take-back schemes, remanufacturing initiatives, and advanced recycling processes to extend product lifecycles and minimize resource consumption.</p><p style="text-align: justify;">Companies are also focusing on decarbonization efforts, with the EU pushing forward directives that require significant reductions in greenhouse gas emissions. Many firms are investing heavily in renewable energy sources like wind and solar to power their operations, electrifying their transportation fleets, and adopting energy-efficient manufacturing technologies. These initiatives align with the EU&rsquo;s Renewable Energy Directive, which mandates</p><p style="text-align: justify;">that at least 42.5% of the EU&rsquo;s energy consumption must come from renewables by 2030, with an aspirational goal of reaching 45%.</p><p style="text-align: justify;">The combination of market forces and robust EU legislation is driving businesses to take sustainability seriously, integrating it into their core strategies to comply with regulations and gain a competitive edge in a rapidly greening economy.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">Q3. Which are the leading sustainable companies in the EU, and what are they doing differently from their competitors?</span></h2><p style="text-align: justify;">Several companies stand out for their leadership in sustainability across the European Union, particularly in the energy sector.</p><p style="text-align: justify;">&Oslash;rsted, Iberdrola, and Vattenfall are prominent examples of firms leading the clean energy transition and setting themselves apart from their competitors.</p><p style="text-align: justify;"><strong>&Oslash;rsted</strong></p><p style="text-align: justify;">&Oslash;rsted, once a fossil fuel-heavy company, has transformed itself into a global leader in offshore wind energy. The company has made aggressive strides toward achieving carbon neutrality, with a clear objective of becoming completely carbon-neutral by 2025. This rapid transformation is a hallmark of their long-term strategy, making them a pioneer in renewable energy development. They differentiate themselves by not just deploying clean technologies but also focusing on innovation and scalability within the wind energy sector.</p><p style="text-align: justify;"><strong>Iberdrola</strong></p><p style="text-align: justify;">Similarly, Iberdrola, based in Spain, is one of the world&rsquo;s largest producers of wind power. The company is not only investing heavily in expanding its renewable energy portfolio but is also decommissioning coal plants and accelerating the shift toward solar, wind, and hydroelectric power. Iberdrola&rsquo;s vertical integration across its energy business enables it to control the entire value chain, from generation to distribution, enhancing its sustainability impact.</p><p style="text-align: justify;"><strong>Vattenfall</strong></p><p style="text-align: justify;">Another notable player is Vattenfall, a Swedish energy company, which is dedicated to enabling a fossil-free future within one generation. The company is investing significantly in wind and solar energy projects, while also exploring innovations like hydrogen production and storage.</p><p style="text-align: justify;">These companies are distinguishing themselves by making sustainability the core of their business strategies, leveraging technological innovation, and fully integrating sustainable practices into every aspect of their operations.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">Q4. What are the best growth opportunities of AI in clean energy for sustainable businesses, and why?</span></h2><p style="text-align: justify;">Artificial intelligence (AI) presents immense opportunities in the clean energy sector, offering solutions that optimize energy production, enhance operational efficiency, and unlock new market mechanisms.</p><p style="text-align: justify;"><strong>AI in Energy Forecasting</strong></p><p style="text-align: justify;">One of the most promising areas is in energy forecasting. AI can be used to analyze historical and real-time data to predict energy demand and production more accurately, particularly for variable renewable sources such as wind and solar power. These predictive models can help grid operators better balance supply and demand, reducing the need for backup fossil fuel generation. By forecasting weather patterns, AI systems can optimize the scheduling and dispatch of renewable energy, minimizing curtailment and increasing the overall efficiency of the power system.</p><p style="text-align: justify;"><strong>AI in Loss Decomposition and Operational Diagnostics</strong></p><p style="text-align: justify;">Another valuable application of AI is in loss decomposition and operational diagnostics. Machine learning algorithms can break down energy losses across the system, identifying</p><p style="text-align: justify;">inefficiencies in generation, transmission, and distribution. For instance, in wind farms or solar parks, AI can detect underperformance in specific turbines or panels by comparing real-time output with expected benchmarks. These insights allow operators to pinpoint and address performance issues quickly, ensuring that renewable energy assets are operating at their highest potential. Moreover, AI can optimize power factor correction and reduce transmission losses, ultimately increasing the financial viability of renewable energy investments.</p><p style="text-align: justify;"><strong>Battery Energy Storage Systems (BESS)</strong></p><p style="text-align: justify;">One of the most exciting areas where AI is playing a transformative role is in the integration and management of Battery Energy Storage Systems (BESS). As the adoption of renewables continues to grow, BESS will become essential for storing excess energy and ensuring grid stability. AI can optimize the dispatching of BESS by predicting market conditions and determining the best times to charge and discharge batteries. For instance, during times of low demand and low electricity prices, AI can instruct the storage system to charge using surplus renewable energy. Then, when demand peaks or prices rise, the AI can direct the system to discharge energy back to the grid, capitalizing on price arbitrage opportunities. This smart dispatching will be crucial in future energy markets, as it enables operators to take full advantage of time-based pricing structures, including day-ahead and intra-day markets.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">Q5. Give a brief overview of the renewable energy market in the EU, including policies, forecasts, etc.</span></h2><p style="text-align: justify;">The renewable energy market in the European Union is experiencing unprecedented growth, underpinned by ambitious policies and a strong commitment to addressing climate change.</p><p style="text-align: justify;"><strong>European Green Deal</strong></p><p style="text-align: justify;">The cornerstone of this transformation is the European Green Deal, which aims to make Europe the first climate-neutral continent by 2050. This policy framework includes bold targets, such as reducing greenhouse gas emissions by at least 55% by 2030 and ensuring that 42.5% of the EU&rsquo;s energy mix comes from renewables by the same year. The Green Deal also supports investments in sustainable technologies, clean energy infrastructure, and the circular economy.</p><p style="text-align: justify;"><strong>Offshore Wind and Solar Photovoltaic (PV) Sectors</strong></p><p style="text-align: justify;">The offshore wind and solar photovoltaic (PV) sectors are among the fastest-growing in the EU. Offshore wind capacity is expected to increase significantly, particularly in countries like Germany, the UK, and the Netherlands. In addition, rooftop solar installations are becoming more widespread across Southern Europe, where sunlight is abundant, with Spain and Portugal leading the way.</p><p style="text-align: justify;"><strong>Green Hydrogen Projects</strong></p><p style="text-align: justify;">Hydrogen is also emerging as a key area of focus, with green hydrogen projects receiving significant EU funding, particularly in industries that are difficult to electrify, such as steel production and heavy transport.</p><p style="text-align: justify;"><strong>Continued Growth of Renewable Energy Sector in EU</strong></p><p style="text-align: justify;">The renewable energy sector in the EU is poised for continued growth, with annual investment expected to exceed &euro;300 billion by 2030. However, this growth is highly dependent on sustained political support and regulatory reforms that streamline permitting and encourage private investment.</p><p style="text-align: justify;">A key challenge lies in grid integration, where increasing amounts of renewable energy are leading to curtailments&mdash;instances where excess energy, especially during low-demand periods, cannot be utilized due to grid limitations. This can result in negative electricity prices, reducing profitability. To address these issues, significant advancements in energy storage, such as Battery Energy Storage Systems (BESS), are essential. While these challenges are</p><p style="text-align: justify;">notable, the outlook for renewables in the EU remains strong, with innovation and investment driving further expansion.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">Q6. Are there any mergers and acquisitions/consolidations that are expected in the renewable energy sector?</span></h2><p style="text-align: justify;">The renewable energy sector is experiencing a wave of technology-driven mergers and acquisitions (M&amp;A), particularly in areas related to software, data analytics, and asset performance management (APM). As the clean energy industry becomes more dependent on technology for optimization and scaling, large players are acquiring specialized firms to improve operational efficiency, integrate advanced digital solutions, and maximize the performance of renewable assets.</p><p style="text-align: justify;">One key area of focus is the merger of companies providing APM software, which is essential for monitoring and optimizing the performance of energy infrastructure, including wind farms, solar parks, and energy storage systems. For example, companies like Also Energy (now Stem), Bax Energy (now Yokogawa), Nispera (now Siemens) and Utopus Insights (now Vestas) have been acquired by larger firms looking to leverage their data-driven solutions. These platforms enhance operational efficiency, optimize maintenance schedules, and predict failures in renewable assets, thereby reducing downtime and improving financial returns.</p><p style="text-align: justify;">Another example is Envision expanded its digital energy management portfolio by acquiring QOS Energy and Bazefield, which it later rebranded as Univers, enhancing its capabilities in data analytics, predictive maintenance, and operational performance optimization for renewable energy assets.</p><p style="text-align: justify;">These types of mergers and acquisitions highlight the importance of digitalization in the renewable energy sector. By integrating advanced APM systems and energy management platforms, companies can not only improve the technical performance of their renewable assets but also capitalize on market opportunities through enhanced energy trading and grid participation.</p><p style="text-align: justify;">In the coming years, we can expect continued consolidation in this space, particularly as larger renewable energy and software players seek to integrate cutting-edge technology into their operations. This trend is being driven by the need to reduce operational costs, improve asset reliability, and maximize returns in increasingly competitive markets. As technology becomes central to the growth and management of renewable energy portfolios, M&amp;A activity will likely focus on software and digital platforms that can drive optimization and profitability across the clean energy landscape.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">Q7. If you were an investor looking at companies within the renewable energy space, what critical question would you pose to their senior management?</span></h2><p style="text-align: justify;">As an investor in the renewable energy space, a critical question to pose to senior management would be:</p><ul style="text-align: justify;"><li>How fully integrated is sustainability into your long-term business strategy, and what specific, measurable goals are you targeting to reduce your environmental impact?</li></ul><p style="text-align: justify;">This question is essential because, in today&rsquo;s environment, sustainability cannot merely be a branding exercise or a short-term project. Investors are increasingly looking for companies that have made a genuine commitment to sustainability, with clear, measurable targets that align with global climate goals such as those set by the Paris Agreement. Companies that are leading the clean energy transition typically have a strong alignment between their business model and long-term sustainability objectives.</p><p style="text-align: justify;">Additionally, it is important for investors to assess how companies measure and report on their sustainability progress. Are they adopting robust frameworks like the EU Taxonomy, Global</p><p style="text-align: justify;">Reporting Initiative (GRI), or Task Force on Climate-related Financial Disclosures (TCFD) to track and disclose their environmental, social, and governance (ESG) metrics.</p><p style="text-align: justify;">Companies with transparent and consistent sustainability reporting are more likely to attract investor confidence and maintain a competitive edge in the market.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>