Financial crisis: Understanding effects on European electric utilities performance

Abstract

The 2008-2012 financial crisis experienced in the Europe has impacted both the politics of energy and the activity of agents that operate at the level of production, trading or distribution of energy. 2010 year marks the increasing severity and peaking of sovereign debt crisis, mainly in EU peripheral countries, but having significant economic effects on entire EU. This article characterizes the business context and presents an analysis of the environmental, social, economic and financial information, generically reported by European electric utilities in 2010 to characterize the impact of the financial crisis on their performance. European electricity utilities were chosen as the object of the present study, both because having a large impact on society, economy and environment and because integrating a regulatory and market specific context. Having to deal with a crescently challenging scenario drived by EU policies, electric utilities were also strongly affected by economic, social and financial consequences of the crisis. The use of PCA techniques allowed identifying a set of indicators representative of the drivers and challenges of that particular period of time, which was determinant for coming developments.