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

FCN Working Paper No. 7/2018

32 Pages Posted: 6 Sep 2018 Last revised: 16 Sep 2018

See all articles by Jan Martin Specht

Jan Martin Specht

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN)

Reinhard Madlener

RWTH Aachen University

Date Written: April 1, 2018

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.

Keywords: Energy Supplier 2.0, Utility of the Future, Business Model Generation, Flexibility, Distributed Energy, Virtual Power Plant

JEL Classification: H23, L94, M21, Q21, Q48

Suggested Citation

Specht, Jan Martin and Madlener, Reinhard, Business Models for Energy Suppliers Aggregating Flexible Distributed Assets and Policy Issues Raised (April 1, 2018). FCN Working Paper No. 7/2018. Available at SSRN: https://ssrn.com/abstract=3236095 or http://dx.doi.org/10.2139/ssrn.3236095

Jan Martin Specht (Contact Author)

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN) ( email )

Mathieustrasse 6
Aachen, 52074
Germany

HOME PAGE: http://www.fcn.eonerc.rwth-aachen.de

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

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