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Energy Trading and Energy Empire: How the Energy Market Works in 2025

From wholesale electricity prices to renewable auctions: navigating the new energy market through volatility, long-term contracts and the green transition.

2026-08-01·4 min
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Italy's electricity price rose 27% between January 2024 and January 2025; gas, over the same period, jumped by 60%. Who really controls the energy supply chain, and how should those who want to invest — or simply protect themselves from volatility — position themselves?

Answering that means distinguishing two concepts that are often conflated: energy trading and energy empire.

01
WHAT IS ENERGY TRADING

What Is Energy Trading

Energy trading is the buying and selling of energy-related assets: electricity, natural gas, renewable sources and certificates of origin. In Italy, electricity is traded on the power exchange, with the PUN (Prezzo Unico Nazionale) as its benchmark. From 2025 the market became quarter-hourly, increasing both the granularity of opportunities and the complexity of management.

Traditionally dominated by utilities and large banks, the sector has opened up to independent renewable producers and industrial offtakers. According to Money.it, cloud platforms and AI-based tools have lowered entry barriers, making the market more competitive.

Volatility is the raw material of trading. Negative prices — increasingly common as renewables expand — create arbitrage windows: buy energy when supply outstrips demand, sell it back during peak periods using battery storage systems (BESS).

Close-up of multiple solar panels representing renewable energy and sustainability
02
WHAT IS MEANT BY

What Is Meant by Energy Empire

Energy empire describes the strategy of those who build a dominant position across the entire value chain: from generation (solar, wind, hydro) to storage, distribution and final retail. It is the model of EDF, Enel Green Power and Iberdrola, but also the direction being taken by infrastructure funds and energy-intensive industrial companies.

The goal is not just short-term profit, but energy sovereignty: locking in one's own costs and reducing exposure to spot market speculation.

Close-up of solar panels harnessing renewable energy under the Austrian sun
03
PPAS: THE CONTRACT

PPAs: The Contract Reshaping the Market

The operational cornerstone of the modern energy empire is the Power Purchase Agreement (PPA): a long-term contract between a renewable energy producer and a buyer that fixes price and volumes in advance.

In Italy, an estimated 20 TWh of energy is expected to be contracted through new PPAs in 2025 alone, with 70–75% attributable to industrial users. Average prices have fallen below €60/MWh — roughly half the spot PUN. Since 1 July 2025, the MASE PPA Decree has introduced the public MPpa platform, contract standardisation and the GSE's role as guarantor of last resort.

There is no standard model: every PPA must be tailored to the buyer's load profile, the project's bankability and expectations about future prices.

04
THE GLOBAL PICTURE:

The Global Picture: Where Capital Is Flowing

According to the World Energy Investment 2025 report by the IEA, global energy investment will reach $3.3 trillion in 2025. Of that total, $2.2 trillion will flow into clean energy — twice as much as into fossil fuels — with solar alone absorbing $450 billion, making it the single largest investment category worldwide.

In Europe, 47.3% of electricity generated in 2024 came from renewable sources, while the share of Russian gas collapsed to 12% from 45% in 2021. The transition is a structural reallocation of capital, not merely a promise.

05
FAQ

FAQ

What is the difference between the spot market and a PPA?

On the spot market, energy is bought and sold in real time at prices that change every quarter-hour. A PPA is a private agreement — typically 5 to 20 years — that fixes price and volume in advance, protecting both parties from volatility.

Do you need to be a large company to access energy trading?

Not necessarily. Digital platforms have reduced the technical barriers to entry. However, structuring a PPA or actively participating in the wholesale market still requires specific risk management skills or the support of a specialist advisor.

Will energy prices fall in the medium term?

Solar PPAs show a downward trend: from €70–90/MWh in 2025 to €55–75/MWh by 2030. On the spot market, however, volatility will remain structurally high as the share of renewables increases and dispatchable generation declines.

06
CONCLUSION

Conclusion

Energy trading has become a strategic space in which industrial companies, investors and mid-sized operators build long-term positions and actively participate in the energy transition. Understanding the logic of the energy empire — supply chain control, structured contracts, smart arbitrage — is today a business competency, not merely a sector-specific one.

To navigate markets, contracts and investment opportunities in the energy sector, visit the LUX LAB VIP area or contact our team for a private consultation.

Sources

Image credits:
Vjanodic WERSOV · Pexels · Pexels
Pixabay · Pexels · Pexels
Michael Pointner · Pexels · Pexels

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