The Business Model Canvas by Alex Osterwalder and Yves Pigneur

We are witnessing a sweeping change being undertaken within the energy sector. The shifting away from traditional models of energy supply, based on one fuel, with limited or no choice for the ultimate consumer, has been our energy system for decades.

Today the energy dynamics of supply and demand are significantly changing. Monopolies are breaking down; be these in the single use of one fuel, in the past fossil fuel (oil, gas, coal) to generate the energy are now being challenged and progressively replaced with the cleaner, more friendly sustaining alternatives offered by solar, wind, water. These offer solutions to bringing down our carbon emissions but are far more dramatic in their impact on the energy systems we have in place.

New enabling technologies are opening us to new opportunities.

The balance between the supply side and the demand is dramatically shifting. The consumer suddenly has a choice and is exercising that in demanding their energy supply to be clean and friendly and expecting new pricing models to reflect their preferences and lifestyles, personalized to their needs. The final consumer is exercising control over their buying experience. The energy supply is becoming vital to them and aligned to the needs of contributing to the cleaning up of the environment, caused by the burning of fossil fuels.

The demands for cleaning up our environment, having clean energies, and choice have begun to disrupt existing structures within the energy system radically. The search is to undertake a radical change in energy sourcing, generating, transmission, and final distribution, and this is coming through the relationship of exploring enabling technologies and innovation, exploiting new energy sources, and making the energy system more reliable, responsive, and efficient.

New business models are suddenly being explored.

Different market designs are going through rapid experimentation, piloting, and scaling. New, more flexible pricing models to attract the consumer in their usage and engagement have created a customer relationship change and different pricing models, more towards subscription as a service one.

Possession has become more fluid; we are sharing assets more to extract more flexible pricing and energy supplies closer to the consumer; we are renting more assets that do a specific job. We see the emergence of the Grid Edge, where intelligent assets are deployed to track, optimize, integrate, and encourage energy usage and saving.

The evolution of business models across the Energy Value Chain

At the Fuel sourcing end, the transition from reliance on Fossil Fuels to having either a mix with renewables or the undertaking to a transition path that delivers power from renewables alone is one major transformation. The implication in different plants, sourcing, and planning is enormous.

The Generation Industry is needing to rethink their business models, ones that are fundamentally moving from a centrally grid-scaled model to a provider of grid services based on fuel source, the attention to higher reliability and cost mechanisms of in and output options

Transmission is moving from one way flows to managing complex power flows. More rerouting, switching, upgrade distribution grids to transmit, store, and become closer to the end market.

Distribution is rapidly moving from manual control to smaller distributed power facilities that provide flexibility for more local power management that integrates variable renewable sources and optimizes capacity supply and demand through power flows and digitally management services

Utilities are rapidly adapting to change from big electricity providers by directly selling power to large generation customers but learning how to aggregate, coordinate and offer different services closer to the customer’s end needs

The final consumer or prosumer are building or requiring their individual small energy systems so that they can optimize to their need and any surplus gets fed back into the grid when it is not needed, offsetting costs and can begin to consider community energy provider arrangements, so they become part of an aggregated system that builds storage into the energy supply mix to have more consistent, reliable flows and pricing.

The need is to explore and exploit new business opportunities

So many new business models are being explored with these changes, new contract arrangements, a different relation of supply of energy and customer. The delivery market will have strong middlemen acting as aggregators or specific delivery market operators that form a partnership with both ends participating,  of users and power generation providers. Different pricing models more based on bidding, personal contracts specific to one customer, different pay service arrangements

The time is right to explore new business models

Today with all the changes and options undertaken in the Energy Transition it is the time for designing and building new Business Models for Energy and knowing the value and aspects of the Business Model Canvas gives a sound point of exploring and experimenting on all the different options within the specific market designs available or planned.

It is well worth revisiting the two books of “Business Model Generation” and “Value Proposition Design,” written by Alex Osterwalder and Yves Pigneur. They can give you an outstanding clarity of building different business models for the significant changes being undertaken in the Energy Transition currently underway.

The post The different innovative Business Models in the Energy Transition first appeared on Innovating the Energy Transition.

Image credit @PerryGrone Unsplash

In the last few months, I have got increasingly nervous about where we are NOT going on climate change

The bush fires of Australia have been shocking, devastating, and crippling. They catalyze the concerns we all should have.

Each of us might or likely will face a shocking, devastating or crippling “event” in our lives in the next ten to twenty years. I feel it is inevitable, irrespective if we stopped all the debates and did the level of investment, we need to reverse the climate warming.

The next ten years of our investments in cutting emissions and refocusing our energy needs must go towards clean energy (renewables). Our ability to make a change will determine if these events recently will become the new norm, as our planet spins even more out of our ability to control climate-warming through greenhouse gases.

So I have to move through this shocking, devastating, and crippling effect but have I have begun to accept  the reality that our world is in a “state of climate alarm,” not just a “climate emergency.”

I have never before published one article on each of my three posting sites. This post I just had to. It is shaping me in how I look at innovation, collaboration, the power of networks, ecosystems and most of all, in our world of energy transition needed to reverse climate warming. So apologies if you see it on three separate sites but I don’t apologize for my real, underlying concern on where we are seemingly heading as a world.

So my emotions are swirling at the moment.

Shocking and devastating was the size, the velocity, and how the fires caught hold and devasted so much of parts of Australia in plant and animal life as well as the human cost and tragedies. As you read of one fire breaking out after another, you became “in awe” of the firefighters. Lacking decent equipment to fight this scale of the fires, they showed all the “Australia pluck and fortitude” they are known for. What a battle. With the intervention of some significant rains recently most, if not all of the blazes seem to have been extinguished; thankfully

Crippling has been the debate since then, and it is only just started. Australia is caught in the middle of the global and country debate on coal. Our need for it versus the need to stop using it. Asia is so reliant; at present, on coal for its energy, we are caught in a real problem.

Energy security is for everyone, irrespective, but while we have this Asian dependence on coal, we are going to struggle very hard with combating climate warming. The carbon emissions from coal are our equivalent “runaway train.” It needs stopping before the damage is beyond repair to our global planet.

Each time I return to the Australian bushfires, and all this means for them and us, I keep wondering is this the “crippling” debate we are going to have in all parts of the world? Can we afford this? The political pressures for coal to be still central to Australia’s thinking is simply staggering.

Then I heard the comment “politics, economics and climate” and the different perspectives.

Another alarm bell suddenly went off for me. I was listening to a podcast by Giles Parkinson and David Leitch “There is no new normal in climate change” (listen to the first 5 minutes if nothing else) introduced me to David’s “its the difference politics, economics, and climate.” Actually, that sums up nearly each “debate” I am reading, engaged in or listening too in recent months. It is politics, economics, and climate differences are today’s debate.

How much longer can we afford to wrangle over these? Saving our climate should be in most if not all our debates and decisions, politics and economics need to get behind, otherwise, they grow in size and scale.

Can we be so much nearer to some (horrific) tipping points?

In the last few days, I have also been reading on the nine different “tipping points” going on. This is an article from Carbon Brief on their “explainer of the nine tipping points that could be triggered by climate change”.

“ Imagine a child pushing themselves from the top of a playground slide. There is a point beyond which it is too late for the child to stop themselves sliding down. Pass this threshold, and the child continues inevitably towards a different state – at the bottom of the slide rather than the top.”

“The persistent march of a warming climate is seen across a multitude of continuous, incremental changes. CO2 levels in the atmosphere. Ocean heat content. Global sea-level rise. Each creeps up year after year, fuelled by human-caused greenhouse gas emissions.”

Passing an irreversible tipping point would mean a system would not revert to its original state even if the forcing lessens or reverses, explains Dr. Richard Wood, who leads the Climate, Cryosphere and Oceans group in the Met Office Hadley Centre.

This leads me to an article by Bob Watson. Does it seemingly get worse- oh, yes? In Bob’s “Nature is being eroded at rates unprecedented in human history, but we still have time to stave off mass extinctions.”

He states, “We have all assumed that nature would always be here for us and our children. However, our boundless consumption, shortsighted reliance on fossil fuels and our unsustainable use of nature now seriously threaten our future.

Environmentalists, scientists, and indigenous peoples have been sounding the alarm for decades. Our understanding of the overexploitation of the planet has advanced with grim, sharp clarity over that time.

We have entered an era of rapidly accelerating species extinction, and are facing the irreversible loss of plant and animal species, habitats and vital crops, while coming face to face with the horrific impacts of global climate change”.

Now I do not want to get into a bragging right position, but I have known Bob Watson since our teens. I stand in “awe” of him and all he has achieved in the years. He is now Sir Robert Watson and has been chair of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), and former chair of the Intergovernmental Panel on Climate Change (IPCC). He has influenced my thinking a lot on all of what matters on climate. How he crystalizes the issues is impressive whenever I have bumped into him or in what I read.

The other part of my past few weeks has been the “sense” the climate debate is shifting.

The message is we must take action”. It needs to be decisive and immediate as it is vital.

We need nature conservation and energy change.

In an article written in May 2019, John Vidal, a former Guardian environmental editor he wrote: “Has the politics of climate change finally reached a tipping point?”

This extracted from the article sums up our need to address and resolve:

“Weaning ourselves off fossil fuels would clear up air pollution rapidly and save billions of pounds a year that the NHS must currently spend dealing with heart attacks, asthma, strokes, and respiratory illnesses. Cities would become more liveable, the countryside more attractive. Instead of being regarded by the government as a costly imposition, action on climate and nature regeneration could be easily recast as visionary politics offering huge public benefits.

But what happens when the voluntary measures run out and the warming is not seen to slow because greenhouse gases are so long-lasting? Really addressing climate and biodiversity collapse means rationing carbon. It means no more free ride for extractive industries such as mining, palm oil and forestry companies who profit from environmental destruction. It means heavy penalties for polluters, the axing of food and aviation subsidies, and taking a torch to vested interests. It means addressing the indirect causes of the crisis, such as population growth and consumerism, even rethinking the whole idea of progress and wealth.”

We are facing a crucial point in time; this decade is our last stand

How do you put together and explain the devastating effects of the Bush fires of Australia and put them into the context of where we live and what climate change will mean for each and every one of us? It is floods, crop failures, deteriorating air, fires, global epidemics, loss of habitat, loss of jobs as we increasingly live in a world of dealing with disruption and dislocation.

“What we’re seeing are the effects of climate change. Sometimes, it’s said that Australia is the canary in the coal mine with the effects of climate change being seen here most severely and earliest… We’re probably looking at what climate change may look like for other parts of the world in the first stages in Australia at the moment,” said Professor Dickman from the Faculty of Science.based in Australia.

If this comment is the reality then what this really will mean in any global action on climate, what will happen if we do pass a tipping point, how much more can we afford to lose in nature, in plants, in animals in our air we breathe before we face something that becomes “catastrophic”?

Do we have any alternatives? Is this too dark for you?

I come back to what made me sit up and realize. Today’s evaluation of anything we do is going to be based on “Politics, Economics and Climate” in what it costs, what it means, and its impact on us.

Which one dominates the others is not the issue; it is we need to make sure all three are of equal importance, yet we need to recognize climate action ‘determines’ the other two in bringing global warming under control. We have nowhere to hid in decades to come and if we do, it is only going to get a whole lot hotter.

I close by quoting Bob Watson “As policymakers around the world grapple with the twin threats of climate change and biodiversity loss, it is essential that they understand the linkages between the two so that their decisions and actions address both.

The world needs to recognize that loss of biodiversity and human-induced climate change are not only environmental issues but development, economic, social, security, equity, and moral issues as well. The future of humanity depends on action now. If we do not act, our children and all future generations will never forgive us.”

The post Economics, Politics and Climate need to come together. first appeared on Innovating the Energy Transition.