Business model strategies: Flexibility trade in low voltage distribution networks

Abstract

Empowered by information and communication technologies (ICT) analytics and smart technologies, the energy model landscape is changing with flexibility at the core of a new energy market design. In particular, multi-sided platforms (MSPs) has gained prominent attention as a business model that creates value by enabling direct interactions between several distinct groups of actors who need each other in order to deliver products to their customers. However, as MSPs are less familiar within the energy market, there has been little investigation in modelling this emerging and dynamic ecosystem. Utilising the business modelling methodology of value network analysis and the key informant technique, value flows were modelled within the context of a MSP to understand the creation, delivery and capture of value in a network of interdependent relationship, its networked position and the stakeholder interactions required for delivery of local flexibility. Supported by this analysis, this paper focuses on the LV area of the smart grid, and presents the Local Flexibility Market (LFM) as a Multi-Sided Plarform. In comparison to the traditional utility model, the complexity of this recharacterization of the industry ecosystem is significant. While it presents new opportunities for incumbent energy providers to collaborate and develop new products, the proposed LFM market design will also dramatically reshape the value model of the industry.