TITLE:
Business Model Innovation Approach for Commercializing Smart Grid Systems
AUTHORS:
Harrison John Bhatti, Mike Danilovic
KEYWORDS:
Smart Grids, Electricity Firms, Business Models, Disruptive Technology, Sustainable Energy
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.8 No.9,
September
30,
2018
ABSTRACT: The depletion of fossil fuels, increased environmental concerns, rising
cost and the demand for clean energy are causing the transformation of energy
generation and distribution system, to shift towards the consumption side.
Electricity generation sources and distribution systems are drifting from
non-renewable to renewable, centralized to decentralized and localized, and
traditional grid systems to smart grid systems. New technologies nurture the
concept of transformation of energy firms, all the way from energy production
to electricity consumption. Smart grid systems are one of the disruptive and
emerging technologies that might influence the entire electricity system. This disruptive
technology demands a new business model which can be used to commercialize the
new power distribution system and thus create value for all stakeholders, from
production to consumption. The Smart grid has the potential to revolutionize
the electricity industry if it is commercialized successfully. It allows information
and communication technology firms to contribute with their modern technology to
empower their consumers to regulate the usage of electricity. To investigate
the reasons for shifting from the old to the new energy system, the impact of
this disruptive technology on energy providing firms, the demand for the new
business model and the approach of the new business model in terms of creating
and capturing values published peer-reviewed articles, and international energy
agency reports have been reviewed. This paper encourages energy providing firms
to redesign business models for commercializing new energy distribution system
and to offer new services to the energy consumers for their future survival in
the new trends of the energy market. These services include integrating with
renewable energy sources, electric vehicle services, and demand response
services to create more value for the consumers and in return gains more profit
for each actor. The services provided through integration of renewable energy
with smart grid and the electric vehicle will empower consumers involvement in
the electricity system which will give them more control over electricity. CO2 production will be reduced, helping to create a clean environment and will
enable operators to improve grid security and network stability. Finally,
demand response services will provide multiple electricity package options to
the consumers in which they can select an appropriate package according to
their need which will give them more control over their electricity bill. System
operators can optimize their grid operations to provide better power quality,
and service providers can increase their income by offering additional
services.