TITLE:
Business Model for Local Distribution Companies to Promote Renewable Energy
AUTHORS:
Bjoern Buesing, Ming Yang
KEYWORDS:
Local Distribution Company (LDC); Decentralized Small-Scale Generation (DSG); LDC Model; Business Model; Renewable Power; Natural Monopoly
JOURNAL NAME:
Low Carbon Economy,
Vol.4 No.4A,
December
3,
2013
ABSTRACT: Decentralized or distributed small
renewable power facilities are usually installed in local communities for
households and small business companies. These facilities include solar PV,
concentrated solar power, and wind power, etc. In order to promote
installations of such facilities, governments in many countries have developed
a number of policies and business models. For example, in Germany and Canada,
electricity feed-in tariff policy and business model were developed; in the
USA, tax rebate policies and relevant business models were promoted. These
policies and models have in some but not in large scale promoted decentralized
small renewable power in local communities. The key issue is that these
policies and business models do not provide sufficient incentives to local
distribution companies (LDC), nor to renewable power installers and users. This
paper’s research covers the creation of a business and communication model,
named as LDC model, to incentivize both renewable power installers/users and
LDCs. This LDC model can play a key role in promoting decentralized small-scale
generation (DSG) with renewable energy in local communities. The core element of
the LDC model is a revenue model which serves as an instrument to finance
renewable installations for households and small commercial businesses. A case
study is undertaken with real data of a power distribution company in Toronto,
Canada. This paper concludes that with appropriate government policy and with
the development of customized information systems for accessing households and
small business via internet, an LDC will be able to take leadership in
investing and installing small renewable power, and consequently enlarge the
share of renewable energy supply in its local power distribution network.