Business models for service delivery to smart homes in cooperation with Dutch grid operators

Abstract

Grid operators in the Netherlands are forced by regulations to introduce the smart metering service in the Netherlands. Consumers in the household have a better insight in their energy usage using the smart metering service. There are opportunities for the grid operator to cooperate with other service providers to share costs regarding the delivery of services to households, such as: 1) Share costs related to the data network; the creation of an own data network requires high investments. 2) Share costs related to service platforms, implementation of smart meters require high investments. The merits and demerits have to be clarified for different organizations in order to involve them in cooperation for the delivery of services to households. The aim of the research is therefore at the creation of viable business models for cooperating organizations that want to deliver services to households, therefore the research question is defined as: “How to share the merits and the demerits of the data network and of the service platform among the Dutch regional grid operators and the cooperating service providers, to make it a viable business model for the delivery of complementary services next to the smart metering service?” This research has an explorative nature; the required qualitative data is collected through desk research and through semi-structured interviews with 13 respondents. Theories and methods from academic literature that are used in this research are services value, service platforms, multi-sided markets, scenario analysis, design cycle of Verschuren, STOF method and STOF model. Other concepts that are explained are smart homes and smart metering. Also, the utility sector, the access services sector, the security sector and the healthcare sector are fully described regarding the services that they deliver to households and about their expectations of cooperation for the delivery of services to households. The scenario analysis is used to design six scenarios, the used dimensions are “regulation regarding the smart meter” and “standardisation and alignment of technology”. The scenarios were validated and three scenarios were selected to be used as a start point for the design of business models. Business models were designed using the design cycle of Verschuren, the STOF method, the STOF model and using multi-sided market theory. The business models are named “null scenario”, “centralized cooperation” and “complete integration” and all represented a different form of cooperation between the grid operator and service providers for the delivery of services to households. The main findings of the research –to answer the research question– is that there are three likely forms of cooperation between the grid operator and service providers, where the merits and demerits are shared in different ways to make the business models viable, which are: 1) The grid operator acts on an individual basis (null scenario business model) for the delivery of smart metering services to households. 2) The grid operator –just like other service providers– cooperates with the access services provider for service delivery to smart homes (centralized cooperation business model). Costs are shared regarding the data network, what results in cost-savings for the cooperating service providers. 3) The grid operator cooperates with the access services provider for their multi-sides service platform services. Smart meters –just like the service platforms of other service providers– are integrated and exist as a virtual service platform in the multi-sided service platform at the consumer side for service delivery. In this business model (complete integration), even more cost-savings are realized for the grid operator and for the cooperating service providers, because the costs of the data network and of the service platform are shared. This study contributes to the scientific economic discipline through the multi-sided market theory, to the scientific business model discipline through the STOF model and to the research domain on service platforms by providing an extensive explanation of this concept. On the practical side, this study provides the management of companies in the service provider market and in the energy market with information what can be used to make better informed strategic choices regarding their business.