The renewable energy debate: how Austrian electric utilities are changing their business models

Abstract

Background: The growing need for energy and the associated increase in environmental problems are leading to ever greater demands for a radical transformation in todays’ power systems with a move towards higher levels of sustainability. Energy utilities need to adapt both their structure and their business model. The aim of this paper is to investigate utility business models related to the provision of renewable electrical energy in Austria. Methods: An explorative qualitative research strategy is applied; this means that case studies were carried out during November 2013 and January 2014. Six interviewees–all leaders in their field–are questioned on their business model for renewable energy. Results: The results show that utilities focus on large-scale renewable energy projects as these do not pose a threat to their current business. Small-scale decentralized renewable energy projects are less important for utilities and require new competencies and business models. Furthermore, some utilities have already started to address other important issues related to their business model such as smart metering or e-mobility. Conclusions: In applying the business model concept to change processes in one specific branch in Austria, the results presented contribute to business model literature. As business model innovation is perceived to be an important step in mastering the challenges of energy transition, the findings are interesting for the utilities concerned.