A new regime and then what? Cracks and tensions in the socio-technical regime of the Swedish heat energy system

Dzebo, Adis; Nykvist, Björn

doi:10.1016/j.erss.2017.05.018

Cited by 39 publications

(31 citation statements)

References 49 publications

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“…The third activity was marketing activity to arrive at an economic value from the waste processing. Two additional studies from Sweden identify the role of national policymaking in the development of business for DH [1,54]. Both studies recognize the lock-in effect of the current business 'regime.'…”

Section: The Business Model In District Heatingmentioning

confidence: 99%

Business Model Changes in District Heating: The Impact of the Technology Shift from the Third to the Fourth Generation

Lygnerud

2019

Energies

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This paper addresses the implications on the business model of district heating companies of the technology shift targeting lower temperatures in the distribution network. Lower temperatures are valuable, since heat supply to low-energy buildings with low grid losses is facilitated. In addition, low-temperature heat sources can be integrated into an efficient energy system, improving the environmental performance of the industry. This technology shift opens a window of opportunity to update the business logic in the sector, since the lower temperatures allow a diversification of the value proposed to customers and a closer, long-term customer relationship. The extent to which the business model is impacted by the shift is not known. Thus, six cases of low temperature implementation from five European countries have been identified. Interviews with the project managers of the implementations show that the six cases made limited change to the primary business model when making the technological shift. Consequently, there is an unexplored potential for updating the value proposition and the customer relationship.

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Section: The Business Model In District Heatingmentioning

confidence: 99%

Business Model Changes in District Heating: The Impact of the Technology Shift from the Third to the Fourth Generation

Lygnerud

2019

Energies

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“…The established district heating technology, referred to as the third generation, is well established, and there is little incentive for switching to heat sources other than waste and biofuels. There is thus a risk that companies are locked-in to the current technology [7,32]. Taking into account that there are alternative uses for biofuels other than incineration, and that the amounts of waste are to be reduced in Europe, identifying alternative heat sources is relevant in the long term.…”

Section: Background: Known Challenges To District Heating In Swedenmentioning

confidence: 99%

“…The competition is fierce in the small house segment as reflected in the public press where there are discussions about the rights of municipalities to condition the heating alternatives of homeowners in newly built, singlefamily homes [47,48]. Disapproval of the natural monopoly status of municipal district heating and policy development incentivizing purchased energy over used energy [49] have made heat pumps a competitive alternative to district heating [7]. It is assumed that heat pumps will continue to take market share from district heating [50].…”

Section: Background: Known Challenges To District Heating In Swedenmentioning

confidence: 99%

“…Third, marketing activities were undertaken to realize the economic value of the output of the processing activity [78]. In a further two studies, the significant role of national policymaking in the development of business models currently used in district heating was addressed [2,7]. The studies pointed out that the current business "regime" is locked-in to supply dominated heat production aimed at sustaining the production of heat itself, while there is limited attention on reducing heat demand.…”

Section: Background: Theoretical Frameworkmentioning

confidence: 99%

“…In Sweden, district heating dominates the heat market with a market share of 55%, and district heating systems are in place in all major cities and towns (there are about 500 systems in Sweden) [6]. Oil and other fossil fuels for heating have been gradually removed over the past 50 years, and the Swedish district heating system is successfully transforming into a low-carbon system [7]. Sweden is, for example, the country that has the largest percentage of industrial heat recovery in its district heating systems in the world [8].…”

Section: Introductionmentioning

confidence: 99%

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Challenges for business change in district heating

Lygnerud

2018

Energ Sustain Soc

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Background: The Swedish district heating sector is successfully transitioning to a low-carbon energy system. The industry has expanded since the 1950s and currently meets more than half the Swedish heat demand. The heat market was deregulated in 1996, and thereafter, companies have been exposed to an increasing number of challenges related to technology, institutional factors and market. Since municipal ownership dominates, municipal companies must manage these challenges to ensure future competitiveness. However, theory suggests that business change is difficult when the current model is still working. To date, Swedish district heating companies have revisited their price models and customer perceptions. There is limited knowledge on how the business challenges are managed and on the management strategy's impact on the business. In this paper, new knowledge is generated regarding how the customer and resource-oriented sides of the municipally owned district heating business in Sweden are changing. Methods: A case study approach was adopted. Data were collected by interviews and by review of the national research programme on district heating (Fjärrsyn). The programme served as a proxy for frontline research on Swedish district heating. The data were analyzed through the business model canvas framework. Results: Changes to meet external pressures are identified on the customer side of the business model, but changes are also spreading to other parts of it. However, the key resource component (distribution networks and production unit) and its logic of economics of scale are unchanged and dominate. The logic is not compatible with shrinking heat demand; nevertheless, it is preferred. Conclusions: It is concluded that external challenges have resulted in changes in the customer side of the business model. However, the largest challenge is the transformation of key resources. Accounting for external challenges extends the life of the current business model, but it is not increasing competitiveness. The prolonged life creates a window of opportunity for the companies to begin the needed transformation of their key resources. If the transformation is successful, district heating will have a role in the future energy system. If the transformation is not undertaken, the future is less certain.

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Heat Roadmap Europe: strategic heating transition typology as a basis for policy recommendations

et al. 2022

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mapping and energy system analysis. Four heat sector types are proposed and discussed. These are (1) extant heat planning traditions, aiming for more efficiency and integration; (2) extant heating infrastructure, aiming to refurbish and upgrade both building stock and existing heating infrastructure; (3) existing gas infrastructure, requiring radical transition; (4) and those without strong historic heat planning traditions.

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A new regime and then what? Cracks and tensions in the socio-technical regime of the Swedish heat energy system

Cited by 39 publications

References 49 publications

Business Model Changes in District Heating: The Impact of the Technology Shift from the Third to the Fourth Generation

Business Model Changes in District Heating: The Impact of the Technology Shift from the Third to the Fourth Generation

Challenges for business change in district heating

Heat Roadmap Europe: strategic heating transition typology as a basis for policy recommendations

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