Renewable electricity business models in a post feed-in tariff era

Patrick Rövekamp, Michael Schöpf, Felix Wagon, Martin Weibelzahl and Gilbert Fridgen

Energy, 2021, vol. 216, issue C

Abstract: To expand intermittent renewable electricity sources (RESs), worldwide energy policy makers have introduced fixed feed-in tariffs (FITs). However, FITs typically expire after a limited time period. Due to the intermittent electricity supply of RES, market distortions, and insufficient flexibility options, exclusive participation in wholesale electricity markets might not be a viable business model for RES that no longer receive a FIT. Thus, it remains unclear which RES business models (RBMs) ensure a viable operation of RES in the post FIT era. To close this research gap, we present a typology encompassing five RBM archetypes: wholesale electricity market (1), physical power purchase agreements (2), nonphysical power purchase agreements (3), self-consumption (4), and on-site power-2-X (5). The typology includes three additional service layers, which may enhance the profitability of RBM archetypes by opening up additional revenue streams: infrastructure services (1), electricity storage services (2), and ancillary services (3). We highlight the need for new approaches to quantify the viability of RBM archetypes and services layers under different regulatory, technological, and market conditions. To prevent the imminent decommissioning of existing RESs, policy makers must shape the next era of the energy transition, weighting the implications of market-based and intervention-based energy policy approaches.

Keywords: Energy transition; Renewable electricity sources; Business model canvas; Business model typology; Feed-in tariffs; Energy policy (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:216:y:2021:i:c:s0360544220323355

DOI: 10.1016/j.energy.2020.119228

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