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Storage Business Models: Lessons for Electricity from Cloud Data, Frozen Food and Natural Gas

Author

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  • Karim L. Anaya
  • Michael G. Pollitt

Abstract

The aim of this paper is to evaluate different well-established non-electric storage markets (cloud data, frozen food and natural gas) in order to identify relevant lessons for electrical energy storage (EES) connected to electricity distribution networks. The case studies that have been evaluated are Google Drive (cloud storage), Oakland International (frozen food storage) and Centrica Storage (gas storage). A specific business model methodology has been selected for comparing the different business model components across these sectors. The methodology (following Johnson et al., 2008) refers to key interconnected components: customer value proposition, the revenue formula, key resources and key processes. The evaluation of the three case studies suggests that well-developed business models already exist in growing and mature storage markets. Regulation plays also an important role across the different storage markets and business model components, however its importance varies depending on the type of market. Innovation in storage business models is also observed (technological and contractual) which should also be facilitated in EES. Innovation helps move storage markets towards more sustainable business models.

Suggested Citation

  • Karim L. Anaya & Michael G. Pollitt, 2019. "Storage Business Models: Lessons for Electricity from Cloud Data, Frozen Food and Natural Gas," The Energy Journal, , vol. 40(1_suppl), pages 409-432, June.
    • Handle: RePEc:sae:enejou:v:40:y:2019:i:1_suppl:p:409-432
    DOI: 10.5547/01956574.40.SI1.kana
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    References listed on IDEAS

    as
    1. Francisco Castellano Ruz & Michael G. Pollitt, 2016. "Overcoming Barriers to Electrical Energy Storage," Competition and Regulation in Network Industries, , vol. 17(2), pages 123-149, June.
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    5. Schill, Wolf-Peter & Kemfert, Claudia, 2011. "Modeling Strategic Electricity Storage: The Case of Pumped Hydro Storage in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(3), pages 59-87.
    6. Francisco Castellano Ruz & Michael G. Pollitt, 2016. "Overcoming barriers to electrical energy storage: Comparing California and Europe," Working Papers EPRG 1614, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
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    8. Sidhu, Arjan S. & Pollitt, Michael G. & Anaya, Karim L., 2018. "A social cost benefit analysis of grid-scale electrical energy storage projects: A case study," Applied Energy, Elsevier, vol. 212(C), pages 881-894.
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