Project

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User Centered Energy Systems Technology Collaboration Programme

In this research project we sought to understand the apparent lack of market uptake of Energy Efficiency. In the first research phase which ended in 2018, we made the case for servitisation in the energy transition, stating that the energy sector could greatly benefit from entrepreneurs that adopt a service-oriented business model, an approach that is user-centred because the service value is being co-created with the end user. A service-oriented business model furthermore pays attention to multiple values that customers are attracted to and often goes beyond financial savings and profitability, values that only appeal to a small segment of customers. Entrepreneurs adopting a servitisation approach often demonstrate a set of entrepreneurial skills that enable them to deliver energy services relatively more effectively than through a technocratic and technology push approach type of product-driven business models.

 

Approach

Several countries together formed the research team for this annex: Sweden, Korea, Switzerland, Norway and the Netherlands in phase 1. Ireland and Australia joined in phase 2. At the start of the Annex the following potentially interesting research themes were identified:

Demand flexibility to reduce emission / Demand Response energy service business models: the capacity to change electricity usage by end-use customers from their normal or current consumption patterns in response to market signals, such as time-variable electricity prices or incentive payments, or in response to acceptance of the consumer’s bid, alone or through aggregation, to sell demand reduction/increase at a price in electricity markets or for internal portfolio optimization.

Circular energy business models: is a business model that strives for employing fewer materials and resources for producing products and/or services, extending the life of current products and/or services through refurbishment and remanufacturing and closing the loop of products’ life by recycling. In short, CBM seeks to reduce, retain, and recycle energy.

Retrofitting business models: Business models that aim to retrofit buildings to reduce the energy use to zero.

Sustainable energy communities: community-initiated initiatives. The emergence of low carbon community driven business models in which users have new roles (from partner to main developer), e.g. microgrid, cVPP and district heating or all-electric

The following set of activities relating to identifying relevant cases was decided upon:

  • Each country decides on which research themes it wants to focus, with at least two. If possible, all four research themes.

  • Each country creates a longlist of available energy service related cases in a selection of these domains. The longlist would consist of about four cases per theme. So around a minimum of eight cases per country would feature on their longlist.

  • Each country would then propose a shortlist of at least four cases per country and the choice of cases to follow-up with would be made collaboratively. The shortlist was based on a template to direct the desk research. This template  consisted of a general case description, an analysis of the business model following a set of questions to be answered, an analysis of the entrepreneurial capabilities following a set of questions to be answered, an assessment of the service orientation of the case following a set of questions to be answered, and an identification of system elements and/ or instruments that support or hinder the creation and uptake of these type of energy services, including a stakeholder and instrument inventory. The questions to be answered were based on the work performed in phase 1 of this Annex.  The desk research would use sources such as reports, websites, other online available materials.

The shortlisted and chosen cases would then be analysed more in-depth.

Research

Results

Nowadays, hardly any value proposition is a pure-product-proposition. Almost every solution is a product-service combination or even a service-only proposition. The famous and successful examples like Spotify, AirbnB and Spotify are all services enabled by smart and innovative technologies.

This is no different in the field of energy efficiency. What might be considered as a high tech solution very often is a combination of a technology and ad-on services like helpdesks, installation or maintenance services, apps or other services. However, different from the famous examples, many business models in the field of energy efficiency, don’t seem to be designed for the actual value proposition. They are still designed as if the Value Proposition is a pure product solution. And it is exactly this ‘unfit’ business model that can be seen as a cause for a bad uptake.

View our publication to learn more about the results

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