IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i4p2241-d502076.html
   My bibliography  Save this article

Regional Electricity Models for Community Energy in Germany: The Role of Governance Structures

Author

Listed:
  • Moritz Ehrtmann

    (Institute of Banking, Finance and New Venture Management, Leuphana University Lüneburg, Universitätsallee 1, 21335 Lüneburg, Germany)

  • Lars Holstenkamp

    (Institute of Banking, Finance and New Venture Management, Leuphana University Lüneburg, Universitätsallee 1, 21335 Lüneburg, Germany
    Institute of Sustainability Governance, Leuphana University Lüneburg, Universitätsallee 1, 21335 Lüneburg, Germany)

  • Timon Becker

    (Institute of Banking, Finance and New Venture Management, Leuphana University Lüneburg, Universitätsallee 1, 21335 Lüneburg, Germany)

Abstract

Community energy actors play an important role in the energy transition, fostering the diffusion of sustainable innovation in the renewable energy market. Because market conditions for business models in the renewable energy sector are changing and feed-in-tariff (FiT) schemes expiring, community energy companies are in the process of innovating their business models. In recent years, several community energy companies in Germany have entered the electricity retail market selling locally generated electricity from their renewable energy installations to customers in their region. We explore the evolving regional electricity business models for community energy companies in Germany, related governance structures, and the role they play for a sustainable energy transition. In order to implement these complex business models, community energy companies cooperate with professional marketing partners (intermediaries), which are capable of taking over the tasks and obligations of electricity suppliers. Through a series of expert interviews and desk research, we identify three distinctive regional electricity business models and examine opportunities and challenges to their implementation. Results show that there are different forms of cooperation, leading to specific governance structures and creating a set of new value propositions. Through these forms of cooperation, business networks emerge, which can function as incubators for sustainable innovation and learning for the post-FiT era.

Suggested Citation

  • Moritz Ehrtmann & Lars Holstenkamp & Timon Becker, 2021. "Regional Electricity Models for Community Energy in Germany: The Role of Governance Structures," Sustainability, MDPI, vol. 13(4), pages 1-24, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:2241-:d:502076
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/4/2241/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/4/2241/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ivan Diaz‐Rainey & John K. Ashton, 2011. "Profiling potential green electricity tariff adopters: green consumerism as an environmental policy tool?," Business Strategy and the Environment, Wiley Blackwell, vol. 20(7), pages 456-470, November.
    2. Bertrand Moingeon & Muhammad Yunus & Laurence Lehmann-Ortega, 2010. "Building Social Business Models: Lessons from the Grameen Experience," Post-Print hal-00528385, HAL.
    3. Herbes, Carsten & Brummer, Vasco & Rognli, Judith & Blazejewski, Susanne & Gericke, Naomi, 2017. "Responding to policy change: New business models for renewable energy cooperatives – Barriers perceived by cooperatives’ members," Energy Policy, Elsevier, vol. 109(C), pages 82-95.
    4. Hoicka, Christina E. & MacArthur, Julie L., 2018. "From tip to toes: Mapping community energy models in Canada and New Zealand," Energy Policy, Elsevier, vol. 121(C), pages 162-174.
    5. Rommel, Jens & Sagebiel, Julian & Müller, Jakob R., 2016. "Quality uncertainty and the market for renewable energy: Evidence from German consumers," Renewable Energy, Elsevier, vol. 94(C), pages 106-113.
    6. J. Carlos Jarillo, 1988. "On strategic networks," Strategic Management Journal, Wiley Blackwell, vol. 9(1), pages 31-41, January.
    7. Aslani, Alireza & Mohaghar, Ali, 2013. "Business structure in renewable energy industry: Key areas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 569-575.
    8. Nolden, Colin, 2013. "Governing community energy—Feed-in tariffs and the development of community wind energy schemes in the United Kingdom and Germany," Energy Policy, Elsevier, vol. 63(C), pages 543-552.
    9. Viardot, Eric, 2013. "The role of cooperatives in overcoming the barriers to adoption of renewable energy," Energy Policy, Elsevier, vol. 63(C), pages 756-764.
    10. Walker, Gordon & Devine-Wright, Patrick, 2008. "Community renewable energy: What should it mean," Energy Policy, Elsevier, vol. 36(2), pages 497-500, February.
    11. Nolden, C. & Barnes, J. & Nicholls, J., 2020. "Community energy business model evolution: A review of solar photovoltaic developments in England," Renewable and Sustainable Energy Reviews, Elsevier, vol. 122(C).
    12. van der Schoor, Tineke & Scholtens, Bert, 2015. "Power to the people: Local community initiatives and the transition to sustainable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 666-675.
    13. Bauwens, Thomas, 2016. "Explaining the diversity of motivations behind community renewable energy," Energy Policy, Elsevier, vol. 93(C), pages 278-290.
    14. Kahla, Franziska & Holstenkamp, Lars & Müller, Jakob R. & Degenhart, Heinrich, 2017. "Entwicklung und Stand von Bürgerenergiegesellschaften und Energiegenossenschaften in Deutschland [Development and State of Community Energy Companies and Energy Cooperatives in Germany]," MPRA Paper 81261, University Library of Munich, Germany.
    15. Hall, Stephen & Roelich, Katy, 2016. "Business model innovation in electricity supply markets: The role of complex value in the United Kingdom," Energy Policy, Elsevier, vol. 92(C), pages 286-298.
    16. Kalkbrenner, Bernhard J. & Yonezawa, Koichi & Roosen, Jutta, 2017. "Consumer preferences for electricity tariffs: Does proximity matter?," Energy Policy, Elsevier, vol. 107(C), pages 413-424.
    17. M. Tina Dacin & Christine Oliver & Jean‐Paul Roy, 2007. "The legitimacy of strategic alliances: an institutional perspective," Strategic Management Journal, Wiley Blackwell, vol. 28(2), pages 169-187, February.
    18. Richard Baskerville & Jan Pries-Heje, 2010. "Explanatory Design Theory," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 2(5), pages 271-282, October.
    19. Tabi, Andrea & Hille, Stefanie Lena & Wüstenhagen, Rolf, 2014. "What makes people seal the green power deal? — Customer segmentation based on choice experiment in Germany," Ecological Economics, Elsevier, vol. 107(C), pages 206-215.
    20. Thomas Mellewigt & Anoop Madhok & Antoinette Weibel, 2007. "Trust and formal contracts in interorganizational relationships - substitutes and complements," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 833-847.
    21. Christine Vallaster & Sascha Kraus, 2011. "Entrepreneurial branding: growth and its implications for brand management," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 14(3), pages 369-390.
    22. Roby, Helen & Dibb, Sally, 2019. "Future pathways to mainstreaming community energy," Energy Policy, Elsevier, vol. 135(C).
    23. Christoph Zott & Raphael Amit, 2007. "Business Model Design and the Performance of Entrepreneurial Firms," Organization Science, INFORMS, vol. 18(2), pages 181-199, April.
    24. Nick Verkade & Johanna Höffken, 2019. "Collective Energy Practices: A Practice-Based Approach to Civic Energy Communities and the Energy System," Sustainability, MDPI, vol. 11(11), pages 1-15, June.
    25. Richter, Mario, 2013. "Business model innovation for sustainable energy: German utilities and renewable energy," Energy Policy, Elsevier, vol. 62(C), pages 1226-1237.
    26. Koirala, Binod Prasad & Koliou, Elta & Friege, Jonas & Hakvoort, Rudi A. & Herder, Paulien M., 2016. "Energetic communities for community energy: A review of key issues and trends shaping integrated community energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 722-744.
    27. Beau Warbroek & Thomas Hoppe & Frans Coenen & Hans Bressers, 2018. "The Role of Intermediaries in Supporting Local Low-Carbon Energy Initiatives," Sustainability, MDPI, vol. 10(7), pages 1-28, July.
    28. Holstenkamp, Lars & Kahla, Franziska, 2016. "What are community energy companies trying to accomplish? An empirical investigation of investment motives in the German case," Energy Policy, Elsevier, vol. 97(C), pages 112-122.
    29. van der Horst, Dan, 2007. "NIMBY or not? Exploring the relevance of location and the politics of voiced opinions in renewable energy siting controversies," Energy Policy, Elsevier, vol. 35(5), pages 2705-2714, May.
    30. Chen, Homin & Chen, Tain-Jy, 2003. "Governance structures in strategic alliances: transaction cost versus resource-based perspective," Journal of World Business, Elsevier, vol. 38(1), pages 1-14, February.
    31. Yael Parag & Benjamin K. Sovacool, 2016. "Electricity market design for the prosumer era," Nature Energy, Nature, vol. 1(4), pages 1-6, April.
    32. Wustenhagen, Rolf & Wolsink, Maarten & Burer, Mary Jean, 2007. "Social acceptance of renewable energy innovation: An introduction to the concept," Energy Policy, Elsevier, vol. 35(5), pages 2683-2691, May.
    33. Hiteva, Ralitsa & Sovacool, Benjamin, 2017. "Harnessing social innovation for energy justice: A business model perspective," Energy Policy, Elsevier, vol. 107(C), pages 631-639.
    34. Herbes, Carsten & Ramme, Iris, 2014. "Online marketing of green electricity in Germany—A content analysis of providers’ websites," Energy Policy, Elsevier, vol. 66(C), pages 257-266.
    35. Lanka Horstink & Julia M. Wittmayer & Kiat Ng & Guilherme Pontes Luz & Esther Marín-González & Swantje Gährs & Inês Campos & Lars Holstenkamp & Sem Oxenaar & Donal Brown, 2020. "Collective Renewable Energy Prosumers and the Promises of the Energy Union: Taking Stock," Energies, MDPI, vol. 13(2), pages 1-30, January.
    36. Dick Magnusson & Jenny Palm, 2019. "Come Together—The Development of Swedish Energy Communities," Sustainability, MDPI, vol. 11(4), pages 1-19, February.
    37. Eggers, Fabian & O’Dwyer, Michele & Kraus, Sascha & Vallaster, Christine & Güldenberg, Stefan, 2013. "The impact of brand authenticity on brand trust and SME growth: A CEO perspective," Journal of World Business, Elsevier, vol. 48(3), pages 340-348.
    38. Sagebiel, Julian & Müller, Jakob R. & Rommel, Jens, 2013. "Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany," MPRA Paper 52385, University Library of Munich, Germany.
    39. Burger, Scott P. & Luke, Max, 2017. "Business models for distributed energy resources: A review and empirical analysis," Energy Policy, Elsevier, vol. 109(C), pages 230-248.
    40. Yildiz, Özgür, 2014. "Financing renewable energy infrastructures via financial citizen participation – The case of Germany," Renewable Energy, Elsevier, vol. 68(C), pages 677-685.
    41. August Wierling & Valeria Jana Schwanitz & Jan Pedro Zeiß & Celine Bout & Chiara Candelise & Winston Gilcrease & Jay Sterling Gregg, 2018. "Statistical Evidence on the Role of Energy Cooperatives for the Energy Transition in European Countries," Sustainability, MDPI, vol. 10(9), pages 1-25, September.
    42. Rogers, J.C. & Simmons, E.A. & Convery, I. & Weatherall, A., 2008. "Public perceptions of opportunities for community-based renewable energy projects," Energy Policy, Elsevier, vol. 36(11), pages 4217-4226, November.
    43. Engelken, Maximilian & Römer, Benedikt & Drescher, Marcus & Welpe, Isabell M. & Picot, Arnold, 2016. "Comparing drivers, barriers, and opportunities of business models for renewable energies: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 795-809.
    44. Holstenkamp, Lars, 2019. "What do we know about cooperative sustainable electrification in the global South? A synthesis of the literature and refined social-ecological systems framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 109(C), pages 307-320.
    45. Brown, Donal & Hall, Stephen & Davis, Mark E., 2019. "Prosumers in the post subsidy era: an exploration of new prosumer business models in the UK," Energy Policy, Elsevier, vol. 135(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lukas Alexander Benz, 2022. "Critical Success Factors for Circular Business Model Innovation from the Perspective of the Sustainable Development Goals," Sustainability, MDPI, vol. 14(10), pages 1-18, May.
    2. Wainer, A. & Petrovics, D. & van der Grijp, N., 2022. "The grid access of energy communities a comparison of power grid governance in France and Germany," Energy Policy, Elsevier, vol. 170(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. F.G. Reis, Inês & Gonçalves, Ivo & A.R. Lopes, Marta & Henggeler Antunes, Carlos, 2021. "Business models for energy communities: A review of key issues and trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    2. Busch, Henner & Ruggiero, Salvatore & Isakovic, Aljosa & Hansen, Teis, 2021. "Policy challenges to community energy in the EU: A systematic review of the scientific literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    3. Haji Bashi, Mazaher & De Tommasi, Luciano & Le Cam, Andreea & Relaño, Lorena Sánchez & Lyons, Padraig & Mundó, Joana & Pandelieva-Dimova, Ivanka & Schapp, Henrik & Loth-Babut, Karolina & Egger, Christ, 2023. "A review and mapping exercise of energy community regulatory challenges in European member states based on a survey of collective energy actors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 172(C).
    4. Cohen, Jed J. & Azarova, Valeriya & Kollmann, Andrea & Reichl, Johannes, 2021. "Preferences for community renewable energy investments in Europe," Energy Economics, Elsevier, vol. 100(C).
    5. Fouladvand, Javanshir & Aranguren Rojas, Maria & Hoppe, Thomas & Ghorbani, Amineh, 2022. "Simulating thermal energy community formation: Institutional enablers outplaying technological choice," Applied Energy, Elsevier, vol. 306(PA).
    6. Jay Sterling Gregg & Sophie Nyborg & Meiken Hansen & Valeria Jana Schwanitz & August Wierling & Jan Pedro Zeiss & Sarah Delvaux & Victor Saenz & Lucia Polo-Alvarez & Chiara Candelise & Winston Gilcrea, 2020. "Collective Action and Social Innovation in the Energy Sector: A Mobilization Model Perspective," Energies, MDPI, vol. 13(3), pages 1-24, February.
    7. Michael Hamwi & Iban Lizarralde, 2019. "Demand-side management and renewable energy business models for energy transition A systematic review," Post-Print hal-02448505, HAL.
    8. Salm, Sarah & Hille, Stefanie Lena & Wüstenhagen, Rolf, 2016. "What are retail investors' risk-return preferences towards renewable energy projects? A choice experiment in Germany," Energy Policy, Elsevier, vol. 97(C), pages 310-320.
    9. Julia Maria Wittmayer & Tessa de Geus & Bonno Pel & F. Avelino & Sabine Hielscher & Thomas Hoppe & Marie Susan Mühlemeier & Agata Stasik & Sem Oxenaar & Karoline K.S. Rogge & Vivian Visser & Esther Ma, 2020. "Beyond instrumentalism: Broadening the understanding of social innovation in socio-technical energy systems," ULB Institutional Repository 2013/312323, ULB -- Universite Libre de Bruxelles.
    10. Inês, Campos & Guilherme, Pontes Luz & Esther, Marín-González & Swantje, Gährs & Stephen, Hall & Lars, Holstenkamp, 2020. "Regulatory challenges and opportunities for collective renewable energy prosumers in the EU," Energy Policy, Elsevier, vol. 138(C).
    11. Bauwens, Thomas & Schraven, Daan & Drewing, Emily & Radtke, Jörg & Holstenkamp, Lars & Gotchev, Boris & Yildiz, Özgür, 2022. "Conceptualizing community in energy systems: A systematic review of 183 definitions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    12. Hackbarth, André, 2018. "Attitudes, preferences, and intentions of German households concerning participation in peer-to-peer electricity trading," Reutlingen Working Papers on Marketing & Management 2019-2, Reutlingen University, ESB Business School.
    13. Dalia Streimikiene & Tomas Baležentis & Artiom Volkov & Mangirdas Morkūnas & Agnė Žičkienė & Justas Streimikis, 2021. "Barriers and Drivers of Renewable Energy Penetration in Rural Areas," Energies, MDPI, vol. 14(20), pages 1-28, October.
    14. Kalkbrenner, Bernhard J. & Yonezawa, Koichi & Roosen, Jutta, 2017. "Consumer preferences for electricity tariffs: Does proximity matter?," Energy Policy, Elsevier, vol. 107(C), pages 413-424.
    15. Herbes, Carsten & Brummer, Vasco & Rognli, Judith & Blazejewski, Susanne & Gericke, Naomi, 2017. "Responding to policy change: New business models for renewable energy cooperatives – Barriers perceived by cooperatives’ members," Energy Policy, Elsevier, vol. 109(C), pages 82-95.
    16. Hackbarth, André & Löbbe, Sabine, 2020. "Attitudes, preferences, and intentions of German households concerning participation in peer-to-peer electricity trading," Energy Policy, Elsevier, vol. 138(C).
    17. Conradie, Peter D. & De Ruyck, Olivia & Saldien, Jelle & Ponnet, Koen, 2021. "Who wants to join a renewable energy community in Flanders? Applying an extended model of Theory of Planned Behaviour to understand intent to participate," Energy Policy, Elsevier, vol. 151(C).
    18. Chiara Candelise & Gianluca Ruggieri, 2017. "Community Energy in Italy: Heterogeneous institutional characteristics and citizens engagement," IEFE Working Papers 93, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    19. Bauwens, Thomas & Devine-Wright, Patrick, 2018. "Positive energies? An empirical study of community energy participation and attitudes to renewable energy," Energy Policy, Elsevier, vol. 118(C), pages 612-625.
    20. Beate Fischer & Gunnar Gutsche & Heike Wetzel, 2020. "Who wants to get involved? Determinants of citizens’ willingness to participate in German renewable energy cooperatives," MAGKS Papers on Economics 202027, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:2241-:d:502076. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.