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Business Models for Energy Suppliers Aggregating Flexible Distributed Assets and Policy Issues Raised

Author

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  • Specht, Jan Martin

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

The ongoing digitalization of the energy sector opens up opportunities for novel business models, which can help to overcome challenges that accompany the transition towards a sustainable energy supply. One necessity in a more decentralized energy system with high shares of renewables is the provision of flexibility. This paper uses the business model generation approach of Osterwalder and Pigneur (2010) to understand the challenges of the transition towards distributed power generation for energy suppliers. The insights gained indicate that the focus of business models in the electricity supply market has to switch to an offer-driven perspective. To this end, the business model of an “Energy Supplier 2.0” as a dedicated aggregator of flexible capacities on the household level is investigated. It is found that the aggregation of flexibilities can provide additional revenue streams, extra customer comfort, support for grid operators, and reduce society’s costs for the sustainable energy transition process. Despite these promising advantages, and even though early movers indicate economic interest, we find that the current regulation and policies bear obstacles for a broad diffusion of this type of business models in the energy sector. We identify several obstacles and suggest solutions how to overcome legislative hurdles where possible.

Suggested Citation

  • Specht, Jan Martin & Madlener, Reinhard, 2018. "Business Models for Energy Suppliers Aggregating Flexible Distributed Assets and Policy Issues Raised," FCN Working Papers 7/2018, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2018_007
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    References listed on IDEAS

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    Cited by:

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    2. 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).
    3. Karami, Mahdi & Madlener, Reinhard, 2018. "Business Model Innovation for the Energy Market: Joint Value Creation for Electricity Retailers and their Residential Customers," FCN Working Papers 15/2018, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    4. Liu, Xueying & Madlener, Reinhard, 2021. "The sky is the limit: Assessing aircraft market diffusion with agent-based modeling," Journal of Air Transport Management, Elsevier, vol. 96(C).
    5. Liu, Xueying & Madlener, Reinhard, 2019. "Get Ready for Take-Off: A Two-Stage Model of Aircraft Market Diffusion," FCN Working Papers 15/2019, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

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    More about this item

    Keywords

    Energy Supplier 2.0; Utility of the Future; Business Model Generation; Flexibility; Distributed Energy; Virtual Power Plant;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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