Regional Electricity Models for Community Energy in Germany: The Role of Governance Structures

• Main Authors: Moritz Ehrtmann, Lars Holstenkamp, Timon Becker
• Format: Article
• Language: English
• Published: MDPI AG 2021-02-01
• Series: Sustainability
• Subjects: community energy; business model innovation; regional electricity retail; intermediary; governance; cooperation
• Online Access: https://www.mdpi.com/2071-1050/13/4/2241

Community energy actors play an important role in the energy transition, fostering the diffusion of sustainable innovation in the renewable energy market. Because market conditions for business models in the renewable energy sector are changing and feed-in-tariff (FiT) schemes expiring, community energy companies are in the process of innovating their business models. In recent years, several community energy companies in Germany have entered the electricity retail market selling locally generated electricity from their renewable energy installations to customers in their region. We explore the evolving regional electricity business models for community energy companies in Germany, related governance structures, and the role they play for a sustainable energy transition. In order to implement these complex business models, community energy companies cooperate with professional marketing partners (intermediaries), which are capable of taking over the tasks and obligations of electricity suppliers. Through a series of expert interviews and desk research, we identify three distinctive regional electricity business models and examine opportunities and challenges to their implementation. Results show that there are different forms of cooperation, leading to specific governance structures and creating a set of new value propositions. Through these forms of cooperation, business networks emerge, which can function as incubators for sustainable innovation and learning for the post-FiT era.