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19th European Roundtable on Sustainable Consumption and Production – Circular Europe for Sustainability: Design, Production and Consumption

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Business model transformation as a critical dimension for green energy entrepreneurship: A review of the literature

Recently, an international effort went into decarbonisation of the energy sector in order to mitigate climate change. Moreover, considerable political efforts have been put into liberalizing energy markets. Since that time, the rules, roles and business models of the conventional actors in the energy sector have been increasingly changing. In parallel, the distributed energy resources (DERs), such as renewables, are increasingly expanding, and they depend on a different logic compared with centralized, large-scale power plants. They yield significant benefits regarding carbon emissions and may contribute to reducing losses in energy distribution. The deployment of renewable energy technologies through sustainable business models opens up access to new entrepreneurs to participate in the energy transition. This paper focuses on emerging business models (BMs) in the energy domain, and it aims to understand the structure of green entrepreneurship of these BMs. The purpose is to describe an array of business model configurations and to classify them following specific characteristics as well as singular business model patterns. The authors conducted a systematic literature review to accumulate evidence across a body of previous research. The following research question has been set up to guide the research process: What are the emerging business models in the energy domain and how can they be analysed and classified? This question emerged in response to the increasing need for new business models that accommodate and facilitate the widespread adoption of sustainable electricity production and consumption. The paper scope is the energy transition focusing on the electricity field; in some cases, papers about non-electrical subjects such as the heating systems for small-scale consumers have been included for their BM interest. Therefore, the chosen articles are in the scope of the renewable energy and demand-side management (DSM) areas. The paper presents two main outcomes. On the one hand it presents an analytical framework that includes the characteristics of Energy Business Models (EBMs) and a synthetic framework for EBM classification. Based on these characterizations, the following attributes have been selected to support the descriptions of the EBMs: Servitization intensity, financing and ownership, the customer’s role, decentralization level, flexibility degree, and management and control. On the other hand, based on this framework, 22 different energy business models are presented. Each business model has been analysed separately using the selected attributes. Then, they have been classified according to two parameters. First, the source of value: novelty, lock-in, complementarities and efficiency; and second, regarding how the value is created: content, structure and governance. As a result, the classified EBMs have been clustered forming eight patterns. The study draws on an exhaustive picture of the emerging business models and provides insights for researchers and for green entrepreneurs to innovate through business model transformation.

Michael Hamwi
ESTIA
France

Iban Lizarralde
ESTIA
France

 


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