Platform Markets and Energy Services

Abstract

A structural shift from transaction-based, marginal cost pricing to feebased service business models often accompanies the emergence of "platform" markets, i.e. multi-sided markets where an intermediary captures the value of the interaction between user groups. The many examples include telecommunications, data storage, cinema, music and media, and the automobile industry. Why not electricity? In this paper, we explore how the electricity supply industry can be conceived of as a platform-mediated, two-sided market and the consequences for pricing. Through two cases, a balancing services provider for smart home energy management systems and an electric vehicle charge manager, we show where a platform entrant could position itself in the retail electricity markets between supply companies and end-users. The drivers of such a transition include increased volatility due to renewable generation, the new complexity of roles for end-users, and the introduction of information and communication technologies. Conceiving of electricity as a platform market where new entrants provide an energy optimisation and management service may stimulate a competitive ecosystem and innovation. We suggest that fee-based pricing would enable the objectives of time-varying pricing to be achieved without adversely affecting the most vulnerable customers.

The fifth archetype of electricity market: the blockchain marketplace

“…Archetype C: the platform model The utilization of the platform business model in the energy market is introduced by [75]. This archetype emphasizes the role of a new actor in the energy ecosystem, namely the platform operator who Fig.…”

“…2 The four archetypes of business models in the energy market Wireless Networks brings together producers and consumers of products and services, creating value by interaction facilitation and matchmaking. The network effect or network externality rises from a platform marketplace, which means the value created by the platform changes in regard to the participation rates on the same side and the cross side [75]. In the energy market, the platform operator creates value by mediating the interactions and matching between groups of end users and value co-creators.…”

Economics of interoperability in the context of smart grid architectures

“…The increasing differentiation of electricity consumers by type and elasticity of demand, as well as the new complexity of interactions between actors on the distribution network, may lead to the emergence of "platform"-mediated interactions as has been the case in other industries whose business models have been radically affected by information and communication technologies (ICT) [25].…”

Business Model Innovation Approach for Commercializing Smart Grid Systems

“…Even if electricity companies assign third-party firms to offer grid services, they can still get profits. Thus, smart grid builds a new market, which requires a new business model [108]. The new market contains electric companies, ICT firms and electricity consumers [109].…”

“…The new market contains electric companies, ICT firms and electricity consumers [109]. Inserting new participants in the electricity delivery chain creates new value [108]. This approach is beneficial for electricity firms as well since they can access resources of ICT firms.…”