Going beyond best technology and lowest price: on renewable energy investors’ preference for service-driven business models

Loock, Moritz

doi:10.1016/j.enpol.2010.06.059

Cited by 97 publications

(40 citation statements)

References 17 publications

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“…utilities and farmers) rather than as actors who finance such investments, e.g. banks, funds, investment advisors, private equity firms or venture capitalists (Loock, 2012). The former initiate the idea for a new plant, mobilize resources to realize it and take ownership of the plant once it is in place.…”

Section: Identification Of Res-e Investorsmentioning

confidence: 99%

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Bergek¹,

Mignon²,

Sundberg³

2013

Energy Policy

135

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Tranforming energy systems to fulfill the needs of a low-carbon economy requires large investments in renewable electricity production (RES-E). Recent literature underlines the need to take a closer look at the composition of the RES-E investor group in order to understand the motives and investment processes of different types of investors. However, existing energy policies generally consider RES-E investments made on a regional or national level, and target investors who evaluate their RES-E investments according to least-cost high-profit criteria. We present empirical evidence to show that RES-E investments are made by a heterogeneous group of investors, that a variety of investors exist and that their formation varies among the different types of renewable sources. This has direct implications for our understanding of the investment process in RES-E and for the study of motives and driving forces of RES-E investors. We introduce a multi-dimensional framework for analyzing differences between categories of investors, which not only considers to the standard economic dimension which is predominant in the contemporary energy literature, but also considers the entrepreneurship, innovation-adoption and institutional dimensions. The framework emphasizes the influence of four main investor-related factors on the investment process which should be studied in future research: motives, background, resources and personal characteristics.

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Section: Identification Of Res-e Investorsmentioning

confidence: 99%

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Bergek¹,

Mignon²,

Sundberg³

2013

Energy Policy

135

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“…Bergek, Mignon, and Sundberg (2013) focus on non-financial investors, similarly finding cognitive aspects of technological beliefs, entrepreneurial appetite, and network learning as important drivers for RE investment. Further work has described how the orientation of business models affects RE investors' behaviour (Pinkse & Van Den Buuse, 2012) and how these business models affect investor preferences beyond conditions of technology attributes and price (Loock, 2012).…”

Section: Investment Challenges: First-and Second-domain Perspectivesmentioning

confidence: 99%

“…RE investment studies have utilised deductive approaches based on questionnaire designs and hypothesis testing, focusing on cognitive factors (Loock 2012;Masini & Menichetti, 2012. Our research aimed to elicit new knowledge about the factors beyond individual/firm cognition that constrain or enable energy investors.…”

Section: Study Of Re Investment In Uk Energy Systemsmentioning

confidence: 99%

Investing in low-carbon transitions: energy finance as an adaptive market

2015

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The amount of capital required to transition energy systems to low-carbon futures is very large, yet analysis of energy systems change has been curiously quiet on the role of capital markets in financing energy transitions. This is surprising given the huge role finance and investment must play in facilitating transformative change. We argue this has been due to a lack of suitable theory to supplant neoclassical notions of capital markets and innovation finance. This research draws on the notion from Planetary economics: Energy, climate change and the three domains of sustainable development, by Grubb and colleagues, that planetary economics is defined by three 'domains', which describe behavioural, neoclassical, and evolutionary aspects of energy and climate policy analysis. We identify first-and second-domain theories of finance that are well established, but argue that third-domain approaches, relating to evolutionary systems change, have lacked a compatible theory of capital markets. Based on an analysis of electricity market reform and renewable energy finance in the UK, the 'adaptive market hypothesis' is presented as a suitable framework with which to analyse energy systems finance. Armed with an understanding of financial markets as adaptive, scholars and policy makers can ask new questions about the role of capital markets in energy systems transitions. Policy relevanceThis article explores the role of financial markets in capitalising low-carbon energy systems and long-term change. The authors demonstrate that much energy and climate policy assumes financial markets are efficient, meaning they will reliably capitalise low-carbon transitions if a rational return is created by subsidy regimes or other market mechanisms. The authors show that the market for renewable energy finance does not conform to the efficient markets hypothesis, and is more in line with an 'adaptive' markets understanding. Climate and energy policy makers that design policy, strategy, and regulation on the assumption of efficient financial markets will not pay attention to structural and behavioural constraints on investment; they risk falling short of the investment levels needed for long-term systems change. In short, by thinking of financial markets as adaptive, the range of policy responses to enable low-carbon investment can be much broader.

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“…The outcome of this work outlines how utility managers developed business model for large-scale renewable based business while at the same time they struggled to identify adequate business models at small scales typical of distributed generation. Loock (2012) reported the results of choice experiments with investment managers for renewable energy aiming to identify their investment preferences. A clearly emerging outcome is the fact that business models proposing best services are considered more attractive than business models oriented to low price and best technologies.…”

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confidence: 99%

General Business Model Patterns for Local Energy Management Concepts

Facchinetti

Sulzer

2016

Front. Energy Res.

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The transition toward a more sustainable global energy system, significantly relying on renewable energies and decentralized energy systems, requires a deep reorganization of the energy sector. The way how energy services are generated, delivered, and traded is expected to be very different in the coming years. Business model innovation is recognized as a key driver for the successful implementation of the energy turnaround. This work contributes to this topic by introducing a heuristic methodology easing the identification of general business model patterns best suited for Local Energy Management concepts such as Energy Hubs. A conceptual framework characterizing the Local Energy Management business model solution space is developed. Three reference business model patterns providing orientation across the defined solution space are identified, analyzed, and compared. Through a market review, a number of successfully implemented innovative business models have been analyzed and allocated within the defined solution space. The outcomes of this work offer to potential stakeholders a starting point and guidelines for the business model innovation process, as well as insights for policy makers on challenges and opportunities related to Local Energy Management concepts.

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Going beyond best technology and lowest price: on renewable energy investors’ preference for service-driven business models

Cited by 97 publications

References 17 publications

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Investing in low-carbon transitions: energy finance as an adaptive market

General Business Model Patterns for Local Energy Management Concepts

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