Business Model Innovation for Local Energy Management: A Perspective from Swiss Utilities

Emanuele Facchinetti,Cherrelle Eid,Andrew Bollinger,Sabine Sulzer

doi:10.3389/fenrg.2016.00031

Abstract

The successful deployment of the energy transition relies on a deep reorganization of the energy market. Business model innovation is recognized as a key driver of this process. This work contributes to this topic by providing to potential Local Energy Management stakeholders and policy makers a conceptual framework guiding the Local Energy Management business model innovation. The main determinants characterizing Local Energy Management concepts and impacting its business model innovation are identified through literature reviews on distributed generation typologies and customer/investor preferences related to new business opportunities emerging with the energy transition. Afterwards, the relation between the identified determinants and the Local Energy Management business model solution space is analyzed based on semi-structured interviews with managers of Swiss utilities companies. The collected managers’ preferences serve as explorative indicators supporting the business model innovation process and provide insights to policy makers on challenges and opportunities related to Local Energy Management.

Highlights

The European ambitions for attaining sustainability targets are visible in the policies and measures deployed by the European Commission to achieve its 2020 and 2030 objectives for emissions reduction, energy efficiency, and increase in share of renewable energy (European Commission, 2012, 2014) and in the recent adoption of the Energy Union strategy (European Commission, 2015)
The results showed that even though business models focusing on large projects insure a better risk–benefit compromise, utilities should urge to invest in business model innovation to take advantage of the forthcoming business opportunities related to smaller distributed generation projects
The effective accomplishment of the energy turnaround relies on a deep reorganization of the energy market

Summary

Introduction

The European ambitions for attaining sustainability targets are visible in the policies and measures deployed by the European Commission to achieve its 2020 and 2030 objectives for emissions reduction, energy efficiency, and increase in share of renewable energy (European Commission, 2012, 2014) and in the recent adoption of the Energy Union strategy (European Commission, 2015). Countries leading the energy transition, such as Germany and Switzerland, adopted policies even more ambitious setting clear and long-term targets for 2050, including substantial reduction in primary energy consumption and carbon emission, increase of renewable energy share, and the phase out of nuclear power (BMWI, 2010; SFOE, 2013; Markard et al, 2015). In this respect, a range of supportive energy policies, e.g., feed-in-tariffs and subsidies, favoring bottom-up investments in renewable energy and energy efficiency measures has been put in place (Anaya and Pollitt, 2015). Virtuous examples are the penetration of solar photovoltaic in Abbreviations: LEM, local energy management.

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