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Timing-based business models for flexibility creation in the electric power sector

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  • Helms, Thorsten
  • Loock, Moritz
  • Bohnsack, René
Abstract
Energy policies in many countries push for an increase in the generation of wind and solar power. Along these developments, the balance between supply and demand becomes more challenging as the generation of wind and solar power is volatile, and flexibility of supply and demand becomes valuable. As a consequence, companies in the electric power sector develop new business models that create flexibility through activities of timing supply and demand. Based on an extensive qualitative analysis of interviews and industry research in the energy industry, the paper at hand explores the role of timing-based business models in the power sector and sheds light on the mechanisms of flexibility creation through timing. In particular we distill four ideal-type business models of flexibility creation with timing and reveal how they can be classified along two dimensions, namely costs of multiplicity and intervention costs. We put forward that these business models offer ‘coupled services’, combining resource-centered and service-centered perspectives. This complementary character has important implications for energy policy.

Suggested Citation

  • Helms, Thorsten & Loock, Moritz & Bohnsack, René, 2016. "Timing-based business models for flexibility creation in the electric power sector," Energy Policy, Elsevier, vol. 92(C), pages 348-358.
    • Handle: RePEc:eee:enepol:v:92:y:2016:i:c:p:348-358
    DOI: 10.1016/j.enpol.2016.02.036
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    8. Lin, Boqiang & Chen, Jiaying & Wesseh, Presley K., 2022. "Peak-valley tariffs and solar prosumers: Why renewable energy policies should target local electricity markets," Energy Policy, Elsevier, vol. 165(C).
    9. Gonçalves, Luisa & Patrício, Lia, 2022. "From smart technologies to value cocreation and customer engagement with smart energy services," Energy Policy, Elsevier, vol. 170(C).
    10. Daziano, Ricardo A., 2020. "Flexible customer willingness to pay for bundled smart home energy products and services," Resource and Energy Economics, Elsevier, vol. 61(C).
    11. Kubli, Merla & Puranik, Sanket, 2023. "A typology of business models for energy communities: Current and emerging design options," Renewable and Sustainable Energy Reviews, Elsevier, vol. 176(C).
    12. Guray Kara & Asgeir Tomasgard & Hossein Farahmand, 2021. "Characterization of flexible electricity in power and energy markets," Papers 2109.03000, arXiv.org.
    13. Chenjun Sun & Zengqiang Mi & Hui Ren & Zhipeng Jing & Jinling Lu & David Watts, 2019. "Multi-Dimensional Indexes for the Sustainability Evaluation of an Active Distribution Network," Energies, MDPI, vol. 12(3), pages 1-24, January.
    14. Lago, Jesus & Poplavskaya, Ksenia & Suryanarayana, Gowri & De Schutter, Bart, 2021. "A market framework for grid balancing support through imbalances trading," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    15. Pol Olivella-Rosell & Pau Lloret-Gallego & Íngrid Munné-Collado & Roberto Villafafila-Robles & Andreas Sumper & Stig Ødegaard Ottessen & Jayaprakash Rajasekharan & Bernt A. Bremdal, 2018. "Local Flexibility Market Design for Aggregators Providing Multiple Flexibility Services at Distribution Network Level," Energies, MDPI, vol. 11(4), pages 1-19, April.
    16. Li, Changsheng & Shen, Bo, 2019. "Accelerating renewable energy electrification and rural economic development with an innovative business model: A case study in China," Energy Policy, Elsevier, vol. 127(C), pages 280-286.
    17. Juliana Zapata Riveros & Matthias Speich & Mirjam West & Silvia Ulli-Beer, 2021. "Combining Business Model Innovation and Model-Based Analysis to Tackle the Deep Uncertainty of Societal Transitions—A Case Study on Industrial Electrification and Power Grid Management," Sustainability, MDPI, vol. 13(13), pages 1-29, June.
    18. Kara, Güray & Tomasgard, Asgeir & Farahmand, Hossein, 2022. "Characterizing flexibility in power markets and systems," Utilities Policy, Elsevier, vol. 75(C).
    19. Bohnsack, René, 2018. "Local niches and firm responses in sustainability transitions: The case of low-emission vehicles in China," Technovation, Elsevier, vol. 70, pages 20-32.
    20. Lauven, Lars-Peter & Geldermann, Jutta & Desideri, Umberto, 2019. "Estimating the revenue potential of flexible biogas plants in the power sector," Energy Policy, Elsevier, vol. 128(C), pages 402-410.
    21. Briest, Gordon & Lauven, Lars-Peter & Kupfer, Stefan & Lukas, Elmar, 2022. "Leaving well-worn paths: Reversal of the investment-uncertainty relationship and flexible biogas plant operation," European Journal of Operational Research, Elsevier, vol. 300(3), pages 1162-1176.
    22. Kubli, Merla & Canzi, Patrizio, 2021. "Business strategies for flexibility aggregators to steer clear of being “too small to bid”," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    23. Michael Hamwi & Iban Lizarralde, 2019. "Demand-side management and renewable energy business models for energy transition A systematic review," Post-Print hal-02448505, HAL.

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