Creating valuable outcomes: An exploration of value creation pathways in the business models of energy communities

Abstract

Energy communities (ECs) have emerged as new, collective market actors within European energy systems. Their innovative business models are thought to result in a multiple types of value creation that transcend mere economic considerations. Yet, despite widespread acknowledgement of this, how multiple types of value are created in ECs remains inadequately explored and understood. We engage with this challenge by (1) situating ECs within the longer history and body of knowledge on community participation in energy systems before (2) mobilising insights on value creation from the literature on business models, and (3) distinguishing between value creation as a business model process and types of value outcomes derived from business activities. We apply this approach to three paradigmatic European cases and through comparative analysis identify two distinct value creation pathways. The first pathway links business activities and how they are assembled to functional value outcomes such as cost savings or CO2 reduction, which are quantifiable. The second pathway links how ECs are governed to normative value outcomes such as increased agency or social cohesion, which is a matter of individuals' perception. These results, we argue, call for greater attention and support to questions of organisation and process to ensure the transformational potential of ECs is realised.