Rate of Change: Markets, Technologies & Geopolitics

We are experiencing the most violent “rate of change” in recent history. Changes affect business models and decision-making. Changes affecting energy and emissions markets are strong examples.

Energy and emissions markets,
(Geo)politics, security policy, and defence,
AI,
Coding,
Regulation,
Business trends, and
Product development

not only change fast but also influence each other.

Companies need convincing approaches for significant change, more market volatility, more complexity, and more interdependency.

Underlying decarbonization trends hit a bumpy road as energy markets experience the second major crisis in a row – energy price impacts from US and Israel’s attack on Iran following the energy price impact of Russia’s invasion of Ukraine. Energy and emissions markets are more complex, are more intensively globally connected, heavily impacted by (geo)politics, security policy, or defence, experiencing a demand surge by AI data centres and run faster with the help of modern IT-infrastructure.

Energy and Emissions markets

Volatility

Volatility in European Gas markets increased 3.6 times recently in reaction to the events in the Strait of Hormuz.

[1]

Price of electricity from fossil and renewable sources

The levelized cost of electricity from fossil and renewable sources changed significantly in the last 15 years. Renewables are leading the cost race, which has a huge effect on power, gas, coal, and emissions markets.

[2]

Ramping Speed

A higher share of renewable power production in power grids leads to the challenge to manage significant power ramps – ups and downs, e.g. around sun rise and sundown. Between 2020 and 2024, the evening ramp in residual wholesale load in New England (ISO), USA increased from 427 MW/h to 712 MW/h (+67 %).[3] In the ERCOT, USA power market the evening ramp increased from 2021 to 2025 by 300%.[4] The evening ramp in Germany during summer 2025 was around 3,8 GW/h, the equivalent of 7-10 (CCGT) natural gas power plants.[5]

Growing value of Flexibility

The weather (wind and sun) driven power generation of renewables spurs demand for flexibility which is increasingly supplied by batteries. Battery integration into the power market requires a fully automated trading setup in intraday and balancing energy markets to be able to react fast enough and optimize profitability.

[6]

“Ticker” Speed

Algo trading continues to drive European intraday power market volume up. Nordpool’s Intraday Continuous volumes grew from 2024-2025 by 59%.[7] EEX’s Intraday volumes grew by 12%.[8]

Negative Power Price Frequency

Oversupply of from renewable sources which is not buffered by flexibility increases the number of hours with negative prices. In Germany hours with negative prices increased markedly over the past years

2025: 575 hours

2024: 459 hours

2023: 301 hours[9]

Surge in Power demand from Data Centres (AI)

AI data centres are pushing global power demand higher.

2025-2030: 465 TWh

2020-2025: 206 TWh

2015 – 2020: 91 TWh[10]

(Geo)politics, security policy, and defence

Russia’s invasion of Ukraine, the US and Israel’s attack on Iran resulted in extreme energy market environments. Ripple effects on the global economy from events in the Strait of Hormuz (mostly affecting energy markets, and in particular oil and gas markets) will be dwarfed by potential impacts from events in the Strait of Taiwan (mostly affecting high performance chips).

Global Economic Policy Uncertainty (GEPU) Index

The Global Economic Policy Uncertainty Index in early 2025 reached three times its level as of the peak of the global financial crisis. [11]

Defence Spending

World military expenditure rose to $2718 billion in 2024. Spending increased every year for a full decade, going up by 37% between 2015 and 2024. The 9.4% increase in 2024 was the steepest year-on-year rise since at least 1988.[12]

“Sensor-to-Shooter” Cycle Time

In 2021, the “Sensor-to-Shooter” cycle time was measured in minutes; in 2026, with AI-driven autonomous systems, it is measured in seconds.[13]

AI

Controlling AI infrastructure is seen by some as more critical to national survival than controlling territory.[14]

Compute Scaling

Since 2021, the computational power used to train top-tier models has grown at a rate that dwarfs Moore’s Law.

[15]

Benchmark Saturation Rate

The speed at which AI “beats” a new human-level test is astonishing. In 2023, AI solved only 4% of complex software engineering tasks; by late 2024, that jumped to over 70%.[16]

The rate of change is so high that researchers are now forced to create “Humanity’s Last Exam”—benchmarks so difficult that even expert humans struggle.[17]

Gigawatts (Power)

Limits of AI are not anymore only defined by fast chips, code, or data, but by how fast power can be supplied (constraint by generation capacity and the quality of network connection). AI is physically throttled by the power grid.[18]

Coding

AI is driving developments in coding. We are witnessing the displacement of human coding keystrokes by machine logic. There is an ongoing transitioned from “writing code” to “orchestrating intent.”

Abstraction Velocity

“Boilerplate” tasks (the repetitive setup code) disappear. Traditionally a developer might spend a significant part of his work on boilerplate code. AI-agentic tools have reduced this time significantly.[19]

“Human-to-AI” Contribution Ratio

In 2026, the average percentage of code in a production pull request (PR) that was generated by a machine versus a human has climbed to 46%.[20]

Cycle Time Compression

The time from “idea” to “deployed code” drops from weeks to hours due to automated testing, AI assisted code generation and review.[21]

Regulation

Regulation intensity and speed in energy and emissions markets, and AI is at an all-time high despite calls for deregulation and a reduction in bureaucracy. Regulators are racing to define who is liable when an AI bot signs a bad contract. Explainable AI (xAI) has become the “gold standard” for regulatory approval.[22]

Legislative Complexity

The German Renewable Energy Law (EEG) grew massively in size and complexity over time.

2023: 110 articles, 250 pages

2021: 105 articles, 180 pages

2014: 104 articles, 110 pages

2009: 66 articles, 45 pages

2004: 21 articles, 15 pages

2000: 12 articles, 5-6 pages[23]

Regulatory Alerts

In 2021, firms tracked an average of 246 regulatory alerts per day globally. By 2026, this has grown significantly, with a new regulatory update taking effect every 7–10 minutes across 190+ countries.[24]

Policy Diffusion Speed

In 2021, the “GDPR effect” (copying of EU legislation on data protection by other jurisdictions) took years; in 2026, the “AI Act effect” may move much quicker.[25]

Business trends

Business moves from successive project-based approaches into a continuous, high-frequency state of operation. Increasingly companies in the energy industry and elsewhere are using AI profitably.

Strategic Cycle Time

In 2021 companies still relied on 3–5 years plans, 2026 leaders use 6–24 months dynamic cycles, with 12% of high-performers operating on a continuous, “rolling” strategy.[26]

AI Investment

In 2024, firms “played” with AI. In 2026 AI investments must fuel measurable P&L outcomes, and increasingly such outcomes materialize, in the energy sector and elsewhere:

10% annual revenue uplift
Single digit % global sales increase
40% reduction in emergency road repair costs; 50% reduction in safety incidents
Therapy development timelines from 2 years to 2 months; testing cycles from days to minutes
2× faster chip design; 5× lower costs; fewer defects
6% improvement over manual assessment; 5× more productive pathology screening
12× increase in screening capacity; 80% reduction in patient treatment costs
36-fold reduction in experimental effort; 30-fold boost in hit rates vs. traditional methods
Prototype cycles reduced from 24 to 13 months; accuracy of new designs from 70% to 95%; 46% reduction in prototype development time
50% increase in production speed; 50% drop in quality consistency variation
Cycle time from 6–12 months to 1–3 months; capacity use from 65% to 83%
3.6x faster concept-to-prototype; 40% reduction in material and energy waste
80% reduction in manual effort for code assessment; 70–80% reduction in manual effort for code conversion; 20–40% reduction in overall project cost; 30–40% increase in code performance optimization
18% faster migration rate; 50% less code rework; coding mistakes requiring rework reduced by 50%; projects delivered 18% faster
12% increase in multidimensional forecasting accuracy; forecasting accuracy improved by 12.5%
Model update speed doubled; 80% reduction in medical literature search time
240% performance increase vs. GPUs; consuming only 1/8 the energy; up to 90% total cost of ownership reduction
28% increase in comfort compliance; 6.4% reduction in monthly energy cost
inspection setup time reduced from days to minutes
14% reduction in MWh consumption; 28% reduction in CO₂ per site/year
Up to 15% energy savings
Disruptions flagged up to 2 weeks earlier; 5% increase in on-time-in-full (OTIF); decision-making time reduced by 50–60%
20% reduction in service delays; 15% reduction in maintenance costs
50% reduction in changeover-related workload; 30% decrease in problem resolution time; ~10% decrease in cycle time
30% reduction in labour costs; 26% reduction in energy use at flagship store[27]

Product development

Teams are optimizing for shipping speed, but speed alone is not the point. Product development is no longer about just how fast features are shipped. It does not matter if delivery is high (many features) if those features do not move business KPIs. You can move fast in the wrong direction.

Product Development Speed

Companies using Digital Twins and AI-augmented design have reported a reduction in product development time of 20% to 50%. Advanced simulation and 3D printing have reduced physical prototyping requirements from an average of three iterations down to just one in many industrial sectors. Integrating AI into their workflows have seen specific design cycle times shrink by up to 70% in certain use cases (e.g., coding, part optimization, and documentation).[28] AI accelerated product time to market by 5 percent, and improved Product Manager productivity by 40%.[29]

Strategy Gap

AI has made shipping features easy, but a simplified approach to AI may lack the solidity of a clear “Why”. 75% of product leaders in 2026 report that they struggle to follow through on strategy.[30]

Only 14% of enterprises across Global 2000 organizations have a clear AI strategy.[31]

Culture Gap

67% of well-formulated strategies fail primarily due to internal misalignment between departments like Product Development, Marketing, and Sales.[32]

AI makes execution faster, but without strategic clarity, feedback loops, the right operating model, and cultural fit, companies may just produce more noise faster.

iits-consulting

iits-consulting is keeping up with the rate of change on markets, the business environment and AI. We help clients by:

turning complexity into usable digital solutions,
building dependable, secure, and trusted systems,
helping clients react faster with better data and modern platforms,
working as a true partner – we are not just a service provider,
collaborating with clients in uncertain environments,
innovating – we help apply modern technologies in a useful way, not just follow hype trends,
delivering quality (passion for code and delivery excellence) – quality and maintainability matter, especially when speed increases, and
knowledge sharing – we enable teams, not just IT systems.

[1] https://www.barchart.com/futures/quotes/TGK26/interactive-chart

[2] https://ourworldindata.org/cheap-renewables-growth

[3] https://www.iso-ne.com/static-assets/documents/100023/2024-annual-markets-report.pdf

[4] https://www.amperon.co/blog/the-rise-of-the-duck-curve-in-ercot-a-shift-in-net-demand-peak-and-the-future-of-solar-power-integration

[5] https://www.electricitymaps.com/grid-in-review-2025/germany

[6] https://www.solarpowereurope.org/press-releases/new-report-eu-installs-27-1-g-wh-of-new-batteries-in-2025-as-utility-scale-storage-drives-record-growth

[7] https://www.nordpoolgroup.com/48f6fa/globalassets/trading-and-services/nord-pool-yearly-volumes-2025.pdf

[8] https://www.eex-group.com/fileadmin/Global/News/EEX/EEX_Press_Release/2026/20260113_EEX_Group_Y2025_Volumes_Final.pdf

[9] https://www.ffe.de/en/publications/german-electricity-prices-on-the-epex-spot-exchange-in-2025/

[10] https://www.iea.org/data-and-statistics/charts/global-electricity-total-demand-growth-by-sector-and-end-use-2015-2030

[11] https://securityconference.org/publikationen/munich-security-report/2026/global-economy/

[12] https://www.sipri.org/sites/default/files/2025-04/2504_fs_milex_2024.pdf