Erasmus'Energy'Forum'2015:''Energy'Informatics'&'Management'

Bridging social innovation and

entrepreneurship: business models
for local renewable energy

Social innovations, manifested in changes of attitudes,

behaviour, perceptions, or social relations and services,
result in new social practices and lifestyles, which are of
paramount importance for the way out of existing
complex environmental, social, economic and cultural
challenges, such as climate change (Avelino et al., 2014;
Cajaiba-Santana, 2014). At the same time, while the
technologies that collectively comprise the smart grid
have existed for decades, the introduction of Information
and Communication Technologies (ICTs) to the electricity
grid embodies the potential to revolutionary change the
way that electricity is generated, delivered, utilised and
priced, making the role of users in the future energy
system central (Verbong, 2013). Smart grid has been
widely welcomed as the enabling technology for renewable
energy integration and distributed energy production,
offering the prospects for redefining the entire energy
landscape (Blumsack and Fernandez, 2012).
The question that naturally arises is whether the emerging
bottom-up initiatives like energy cooperatives, ecovillages,
or transition towns throughout Europe and beyond have
the potential of accelerating the required radical change of
our energy system. This question is justified as green
lifestyles are presumed to only have an appeal to a small
minority of citizens and so far do not diffuse widely
because of (perceived) disadvantages like higher energy
costs, sacrifices in terms of comfort and the requirement
of certain skills and capacities (Baas et al., 2014). Those
who share a more optimistic view can, instead, argue that
bottom-up sustainability initiatives have reached a
support base so large and diversified that it has the
potential of expanding throughout large segments of
society.
To make such alternative sustainable initiatives and
lifestyles more attractive to the broader society, a better
understanding of the way they create and communicate
Erasmus'Energy'Forum'2015:''Energy'Informatics'&'Management'

value to individuals as well as society is considered

essential. On this account, our study orients towards
helping understand and assess this mechanism of value
and benefit creation, with the aim to develop in parallel
ideas on how to improve it.
To this end, our research merges two interlinked
conceptual issues: (1) the concept of niche, which
according to the transition framework is the place where
the options for radical change (both technical and
institutional) are being developed (Kemp et al., 1998) and,
to some extent, shielded (Smith and Raven, 2012) and (2)
the concept of business model, which refers to quantifying
the logic behind any kind of entrepreneurial activity and,
at the same time, communicates it to a wider audience by
a narrative/storyline that may have (or lack) an appeal to
the ´outside´ world (Magretta, 2002).
As initiated and designed in response to specific
sustainability problems perceived in the regime, niches
can be seen as a concept opposed to certain features vis-à-
vis the regime, representing alternative to the dominant
configurations. In our work, we aim to move beyond the
dichotomy between regime and niche, conceptualising the
niches as “embryonic regimes” in that they may not have
(yet) attained a strong degree of institutionalisation, but
potentially consist “nuclei for future (radically different)
regime structures” (Fuenfschilling and Truffer, 2014, p.
773).
Despite the abundance of scholars focusing on them,
business models are often studied without an explicit
definition of the concept; sometimes they are defined
through the identification of the components that they are
consisted of. In our research, we build on Doganova and
Eyquem-Renault (2009) who have grouped the business
model elements into three building blocks: the value
proposition; the architecture of value that lists the
partners and channels through which value is produced
and delivered; and the revenue model. Business models
are addressed to a wide and diverse audience as investors,
journalists, partners, policy makers, and have been
described as “a reference point for communication
among the different actors with whom entrepreneurs
engage’’ (Boons and Lüdeke-Freund, 2013, p. 10).
The main question our research addresses is how local
renewable energy initiatives develop and emerge, and
whether and how business models may help initiatives in
their growth and expansion. This question is complex. As
we will put forward, the great variety of renewable energy
initiatives ranges from entrepreneurial and business-
Erasmus'Energy'Forum'2015:''Energy'Informatics'&'Management'

minded initiatives to others averse of a clearly articulated

business model, making the business model concept look
both attractive and unattractive to them. In turn, bottom-
up initiatives are characterized by features that prevent
them from producing business models that are both
economically realistic and attractive to a larger audience.
Not surprisingly, these (in)abilities of energy initiatives to
produce viable business models can be connected to
attempts by actors within the energy regime to discourage
them.
Drawing upon cases from energy initiatives in the
Netherlands, we study their business models as a vehicle
and subject of innovation. The purpose is to explore and
describe the dynamics that play out in and between niche
dimensions and investigate the complex processes of
niche emergence, focusing on transformative learning and
agency, manifested as actors break away from the given
frame of action and take the initiative to transform it. We
consider such initiatives within their niche context as
embryonic regimes in that they contain the elements of
potential future regimes. By taking the dimensions of a
business model we will present the preliminary
conceptual framework with which we evaluate a number
of such initiatives and identify opportunities for
strengthening their value propositions. Our research is
still on-going but the results are going to be available at
the forum.
Erasmus'Energy'Forum'2015:''Energy'Informatics'&'Management'

References
Avelino, F. Wittmayer, J., Haxeltine, A., Kemp, R.,
O’Riordan, T., Weaver, P., Loorbach, D., & Rotmans, J.
(2014). Game-changers and Transformative Social
Innovation. The Case of the Economic Crisis and the New
Economy, TRANSIT working paper, TRANSIT: EU
SSH.2013.3.2-1 Grant agreement no: 613169
Baas, L., Magnusson, D., Mejía-Dugand, S., & Pizano-
Castillo, M. (2014). Emerging enlightened selective self-
interest trends in society: Consequences for demand and
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Blumsack, S. and Fernandez, A. (2012) Ready or not, here
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