Credit ratings agency Moody’s has warned that Europe’s shift towards low-carbon sources of power could threaten the continent’s energy network operators.

Analysts concluded that the introduction of disruptive technologies and accompanying new regulations could alter the network operators’ business models and undermine the quality of their credit.

Stefanie Voelz, Vice President and Senior Credit Officer at Moody’s, said: “The shift to renewables in Europe has thrown up different challenges for the region’s energy network operators, with the huge uptick in renewables-related investment into electricity networks posing execution risks, while the move to decarbonisation casts doubt over the long-term use of natural gas and the networks that distribute it.”

The report warned that network operators could be slow to react to the changing landscape.

Renewables and storage

Moody’s highlighted the possibility of customers being more independent, generating their own renewable electricity and then storing it.

The firm said that increased use of electricity for transport and heat could also change network requirements.

One possible outcome could be sector fragmentation, it added.

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