TY - JOUR

T1 - Utilities' Business Models for Renewable Energy

T2 - A Review

AU - Richter, Mario

PY - 2012/6

Y1 - 2012/6

N2 - The transformation of today's electric power sector to a more sustainable energy production based on renewable energies will change the structure of the industry. Consequently, utilities as the major stakeholders in this transformation will face new challenges in their way of doing business. They will have to adapt their business models to remain competitive in the new energy landscape. The present review of business model literature shows that two basic choices exist: utility-side business models and customer-side business models. The two approaches follow a very different logic of value creation. While the former is based on a small number of large projects, the latter is based on a large number of small projects. The article reveals that blueprints for utility-side business models are available, whereas customer-side business models are in an early stage of development. Applying the business model framework as an analytical tool, it is found that existing utility-side business models comprise a series of advantages for utilities in terms of revenue potential and risk avoidance. This study provides new insights about why utilities will favor utility-side business models over customer-side business models and why they also should engage in customer-side business models in their quest for more sustainable future business models.

AB - The transformation of today's electric power sector to a more sustainable energy production based on renewable energies will change the structure of the industry. Consequently, utilities as the major stakeholders in this transformation will face new challenges in their way of doing business. They will have to adapt their business models to remain competitive in the new energy landscape. The present review of business model literature shows that two basic choices exist: utility-side business models and customer-side business models. The two approaches follow a very different logic of value creation. While the former is based on a small number of large projects, the latter is based on a large number of small projects. The article reveals that blueprints for utility-side business models are available, whereas customer-side business models are in an early stage of development. Applying the business model framework as an analytical tool, it is found that existing utility-side business models comprise a series of advantages for utilities in terms of revenue potential and risk avoidance. This study provides new insights about why utilities will favor utility-side business models over customer-side business models and why they also should engage in customer-side business models in their quest for more sustainable future business models.

KW - Sustainability sciences, Management & Economics

KW - Analytical tool

KW - Business models

KW - Electric power sector

KW - Energy landscape

KW - Large project

KW - Renewable energies

KW - Revenue potential

KW - Risk avoidance

KW - Sustainable energy

KW - value creation

KW - Energy research

UR - http://www.scopus.com/inward/record.url?scp=84858410111&partnerID=8YFLogxK

U2 - 10.1016/j.rser.2012.01.072

DO - 10.1016/j.rser.2012.01.072

M3 - Scientific review articles

VL - 16

SP - 2483

EP - 2493

JO - Renewable & Sustainble Energy Reviews

JF - Renewable & Sustainble Energy Reviews

SN - 1364-0321

IS - 5

ER -