New Business Models in the Electricity Sector

Abstract

The electricity sector is facing a new wave of changes supported by new business models, two of which are key to our understanding of the ongoing transformations. The first model secures ex-ante investments into fixed cost generation assets with guaranteed long-term revenue streams. It is typical of investments into green generation, be they wind or solar, onshore or offshore, utility-scale or individual prosumer, within regulated schemes or private bilateral contracting. The second model is built with the light asset approach typical of the digitalisation era. It favours particular product characteristics for targeted customers and has many variants: aggregators as new intermediaries; digital platforms bypassing intermediaries; direct peer-to-peer exchange such as blockchain; fleets of consumption, generation and storage devices managed 'behind the meter', such as mini-grids or off-grid. Between the two, transmission and distribution grids will have to reinvent, as much as regulatory frames will permit, to create efficient loops of deeper interaction with the active users of the grids in operation and investments.

Regulatory Experimentation in Energy: Three Pioneer Countries and Lessons for the Green Transition

“…The European Commission reports that 12 of the 28 EU Member States did not include any form of financial obligation on wind and solar power produc-ers for balancing in 2013 (European Commission, 2013). Besides other regulated revenue schemes promoted by public authorities, such as those described by Glachant (2019), this waiver was another form of support. Without it, wind and solar power producers would have been exposed to greater risk, and this risk could have rendered their novel business models non-viable.…”

Digitalization of the electricity infrastructure: a key enabler for the decarbonization and decentralization of the power sector

“…The increased availability and usability of detailed data concerning the energy consumed or produced by final customers allow the creation of innovative products and pricing models (Brown et al, 2019;Glachant, 2019;CEER, 2019b;Morris et al, 2020). Beyond the traditional supply of kWh at a predefined price and connection point with the grid, the provision of tailor-made services addressing the specific needs and preferences of each customer, be she a household or a small factory, becomes possible.…”

“…By doing this, aggregators perform the reverse function of normal energy retailers. Both independent and integrated aggregators exist (Glachant, 2019). Robert Schuman Centre for Advanced Studies Working Papers periodic subscription fee or via a small transaction-related chargeand gets the possibility to interact with other customers without having to take care of all the intricacies of energy markets (Glachant, 2020).…”

Optimal Sizing of Battery Energy Storage for Grid-Connected and Isolated Wind-Penetrated Microgrid

“…Wind power, P w is largely dependent on wind speed, v and the relationship between wind power and wind speed is cubical. The wind power PW t , at hour t, is usually calculated from the wind speed [28] as presented (2).…”

“…Moreover, with the growth in electricity demand across the world, there are pressures on the need to find alternative clean sources of electricity to replace or to be added to the existing fossil fuel sources which is currently under the pressure of being faced out due to its popular greenhouse gases' emissions known to be hazardous to our friendly environment. Following the reports of the installation of more renewable generation (including wind and PV) than fossil fuel generation across the world [1], [2], there are corresponding reports that the price of electricity is becoming cheaper and emission of greenhouse gasses due to electricity generation are also decreasing [3]. An important aspect of renewable power generation is its integration with the existing utility system.…”