Digital platforms across the European regional energy markets

Abstract

Digital platforms increasingly propose business models that improve economic organisation -by better coordinating supply and demand under imperfect information- and attain higher efficiency levels. At the same time, the energy generation gradually reshapes into decentralised network with lower capacity, but able to manage demand and supply in real-time. However, the penetration of online platforms within the energy sector poses policy questions that are specific to platforms' business models. This study investigates a sample of 217 digital platforms running energy-related activities across the EU regional markets. These energy platforms make about 20% of the world energy platforms. By observing their characteristics and those of their surrounding markets, it appears that the digital platforms in the European energy sector still tend to be relatively small and concentrated in specific regions, often in the neighbourhood of capital cities. Furthermore, the quantitative analysis suggests that market size, digital readiness and regulatory quality are the most important features relating to platforms' presence in the EU regional markets. This paper offers empirical evidence and reflections to provide energy policy with key information to best ripe the potential of new technologies while being aware of their inherited complexities.