A paper recently published in the journal Energies reviewed the application of digital technologies in the renewable energy sector.
Study: Digitalization in the Renewable Energy Sector— New Market Players. Image Credit: Yellow duck/Shutterstock.com
Digital technologies will play a key role in the emerging new economy (NEE) in upcoming years. These technologies can facilitate the collection, management, and analysis of substantial amounts of data more efficiently. Thus, digital technologies can promote the development of digital business models in the energy sector.
Electricity generation from renewable sources has gained considerable attention to meet the energy requirements amidst the effects of climate change and the energy crisis due to the outbreak of coronavirus disease (COVID-19) pandemic and sanctions on the supply of fossil fuels from Russia. However, renewable energy also has certain drawbacks.
For instance, ensuring supply stability and proper energy storage are the major issues in the fastest-growing wind and solar energy industries. These problems can be addressed by the digitalization of renewable power generation and the implementation of digital business models in the renewable energy sector.
Data collection and selection model. ES—Energy storage, EP—energy providers, W—Wind, S—Solar. Image Credit: Pakulska, T et al., Energies
In this study, researchers identified and reviewed a framework of business models within a number of wind and solar energy startups operating in the energy supply and storage industries in the renewable energy sector. A research algorithm was employed to identify and classify the startup business models using R software based on the secondary data.
Implications of Innovative Business Models for the Energy Industry
The introduction of the Internet facilitated the dynamic growth of digital business and the transformation of standard resource-based business models to business models based on ecosystem and network effects. Digital technologies, such as artificial intelligence (AI) algorithms, big data analytics, cloud-based services and applications, Internet of Everything (IoE), and Internet of Things (IoT), were the major drivers of growth in the digital economy.
Typically, digital technologies were considered as digital tools enabling fundamental changes in the enterprise operations or value delivered to customers. Digital technologies allowed the creation of innovative business-to-customer (B2C) and business-to-business (B2B) models and other new customer-centric models.
In the energy industry, innovative business models expanded their orientation on services by combining dedicated digital solutions, with several products at their core being turned into complex systems. These systems combine connectivity, software, microprocessors, data storage, sensors, and equipment in different ways, leading to the rising number of digital energy products in the energy industry that can be availed online in the form of information and data.
Technologies in power industry startups by energy sub-industry. Image Credit: Pakulska, T et al., Energies
Role of Digitalization to Alleviate Renewable Energy Challenges
The entry of big technology players in the renewable energy industry significantly contributed to the growth of renewable power generation. These players purchase renewable energy for their subsidiaries located in different parts of the world.
For instance, information and communication technology companies accounted for a leading share of global corporate renewable energy procurements in the past few years. However, the transition to renewable energy created new challenges and …….