Pre-Conference Workshop: Disrupt yourself, or be disrupted!
New information and communication technologies will soon revolutionize the energy sector. Smart meter reading is just the beginning. The introduction of disruptive new IT technologies like Big Data Analytics, Cloud Computing, Social Media and Internet of Things, opens up for new business models, new energy related services and new energy market players.
Digitalization is having a dramatic effect on several areas and industries. It is disruptive in that it puts prevailing rules and business models out of action – and establishes new ones, like streaming music and video services, UBER challenging the taxi industry world-wide, and AirBnB challenging the global hotel industry, to name a few examples.
The European power sector has long been spared disruptive changes. That time will soon be over. Which new business models will emerge and which new actors will enter the energy scene? How can today’s energy companies disrupt themselves, as other successful businesses have done, to survive disruptive changes in enabling technologies?
In this pre-conference workshop, we will present new players on the energy scene, with examples from Nordic and Continental energy businesses. You will meet newcomers with challenging and exciting business ideas and you will participate in discussions on how to exploit technology and business disruption. Please find the detailed workshop programme here.
- Dieter Hirdes, EMPOWER
- Prof. Bernt A. Bremdal, NCE Smart Energy Markets
- Dr. Christian Kunze, Swiss Grid
- Prof. Dr. Moritz Loock, University of St.Gallen
- Dagfinn Wåge, Lyse Energy
1. Winning the Solar Customer – The Power of Aesthetics and Peer Effects for Successful PV Marketing and Sales
As solar power is moving closer to grid parity and feed-in tariffs are fraught with policy risk, marketing photovoltaic systems to homeowners requires new approaches. Based on the University of St. Gallen’s latest research insight into consumer preferences for residential photovoltaics, participants will explore the role of social prestige, aesthetics and social norms in PV adoption. Brian F. Keane, an experienced marketing expert and president of SmartPower, will share best practice examples from the United States of how to most effectively leverage the power of peer effects. Based on experiences from the innovative outreach campaign "Solarize", backed by the US Department of Energy, Keane will demonstrate how – and why – homeowners in the United States are adopting solar at a record pace. After the presentations, workshop participants will be invited to join a discussion about how these insights can be integrated into their daily business.
- Brian F. Keane, President, SmartPower, USA
- Prof. Dr. Stefanie Hille, University of St. Gallen
- Hans C. Curtius, University of St. Galleny
2. Strategic Innovation in the Energy Industry
The energy industry is undergoing a fundamental transformation. The sharing economy, digitalization and regulation constitute only some of the key trends that give rise to enormous opportunities. They can drive success by pushing energy players to rethink their business models. Although the ways in which these opportunities can be leveraged are manifold and diverse in nature, they have one common element: identifying and creating a sustainable position for the future!
This workshop concentrates on strategies for renewal in the energy industry with a specific emphasis on decentralization trends in the energy market. It reveals how and why firms take a variety of approaches to taking advantage of opportunities when deciding how to go forward. In the first part, incumbent utilities outline their views about future decentralized energy markets. They uncover the enablers and constraints to successfully renewing once successful business models, and point to some of the challenges that they see going forward. In the second part, these insights will be contrasted with innovative startups’ visions of the future energy market. These institutions identify the components of innovative business models, and bring in their own experiences about the drivers and barriers to successfully implementing their strategies. In the third and final section, these insights will be discussed and integrated into a joint roadmap for strategic renewal in the energy industry.
- Prof. Dr. Moritz Loock, University of St. Gallen
- Dr. Emmanuelle Reuter, University of St. Gallen
- James Johnston, CEO, Open Utility
- Marcel Morf, Head of Division "Grossprojekte & Speziallösungen"/Member of Executive Board, Alpiq InTec AG
3. Investing in Renewables: Insights from Commercial Real Estate
Energy accounts for 30% of operating expenses in a typical office building and the impact of energy costs directly affects tenants and landlords. “Green” buildings attract a considerable financial premium in terms of rental and sales price. Furthermore, environmental rating systems for commercial properties aim at reducing information asymmetries on building’s degree of energy efficiency and sustainability between landlord (investor) and tenant (occupier) or seller and buyer. However, with the increasing diffusion of green certificates, the premiums for real estate companies gradually decrease. This trend leads to an increased attention to cost savings by reducing water and electricity consumption and making use of energy supply contracting as well as sustainable facility management. Starting with the question how green labeling and the “greenness” of a commercial property portfolio affects financial performance, we aim at exploiting additional sources of profitability from sustainability. We thereby investigate how our experiences from real estate operating companies (or REITs) can be used for other investments and businesses in sustainability.
- Prof. Dr. Roland Füss, University of St.Gallen
- Samdruk Dharshing, University of St.Gallen
- Sebastian Carneiro, Director Energyefficiency, SUSI Partners
4. Solar PV Self-Consumption between "Death Spiral" and "Sun Tax"
Decentralized renewable energies, especially Photovoltaic (PV), have started a trend whereby "prosumers" replace consumers. The spread of PV systems has significantly contributed to the creation of a more sustainable power supply in Switzerland, as well as fulfilling the goal of the energy strategy 2050. On the other hand, the income of grid operators has declined due to the rising number of prosumers. PV owners consuming their own power usually require less energy from the power supply system, but still use the services of distribution grid operators. As a result, it might become necessary in the future to increase grid charges for households without PV systems in order to compensate for losses, because standard pricing will no longer cover costs. This cycle of adapting tariffs for grid usage leading to higher attractiveness of prosuming is often called "death spiral". This situation raises many questions: is a new grid tariff system necessary to put an end to this vicious circle, cover grid costs and protect grid operators from a decline in their incomes? Is a "solar tax" for solar power producers killing the energy transition? What are the appropriate incentives for running decentralized facilities according to the needs of grids? And how is decentralized storage going to influence this setting? Together with experts we will discuss the complex issues regarding prosuming and grid regulation.
- Merla Kubli, University of St.Gallen
- Peter Graf, Head Energy and Marketing, St.Galler Stadtwerke
- Renato Marioni, Swiss Federal Office of Energy
- Dr. Rudolf Rechsteiner, Board Member, iwb, senior consultant to Swissolar
5. #YieldCo – Finding the Magic Formula for Renewable Energy Investments
In numerous European countries, the energy transition is a high priority topic. In contrast to conventional energy infrastructure, the renewable energy market has attracted a very heterogeneous set of investors and has created many new investment vehicles for optimizing project related cash flows. YieldCos are at the forefront of these discussions and have the potential to play a major role in financing parts of Europe’s renewable energy infrastructure. A YieldCo is a cash-generating infrastructure asset that spins out ownership to public markets. Additionally, many market participants see YieldCos as a „magic formula“ to generate positive cash flows in contrast to less attractive business units. What are the pros and cons of YieldCos as compared to traditional project financing instruments? What can be learned from the bumpy ride of U.S. YieldCos for financing renewables in Europe? What is the primary goal of utility companies vs. institutional investors as regards pushing forward such investment vehicles? The workshop will provide background information about these emerging questions and potential and future development will be discussed with experts.
- Sarah Salm, University of St.Gallen
- Dr. Celine McInerney, University College Cork, Ireland
- Dr. Christoph Sutter, Head of Divison New Energies/Member of Executive Board, Axpo AG
6. Should I Stay or Should I Go? – Risk-Return Profiles of Domestic vs. International Energy Investments
Switzerland, located in the heart of Europe, is home to many international investors. Nearly 90% of Swiss investment targets renewable energy projects abroad (BNEF, 2015). While there is a case for international diversification, putting eggs in too many different baskets may also bring new risks. In energy investment these risks include, for example, currency and politics. Mitigating those risks in different locations involves incurring additional costs, which have to be earned through higher returns.
In this workshop we examine risk-return profiles of domestic and international investments. To stimulate fruitful discussion, investment community experts and risk assessment specialists will share their experiences. Successful and less successful investment cases and risk mitigation strategies will be discussed. Based on international perspectives on energy investment risk and return, participants will have a chance to discuss their own experiences and reflect upon the implications for future investment strategies.
- Yuliya Karneyeva, University of St.Gallen
- Pascal Egloff, Banking Analyst, Power & Energy Utilities, European Bank for Reconstruction and Development
- Christian Gradel, CFO, re:cap global investors ag
- Clemens Hasler, CEO, SN Energie AG & Kraftwerke Zervreila AG
7. EMPOWER to the People!
In the future, most of the energy we use will be produced where it is consumed. The surplus from your PV panels may be sold to your neighbors or stored locally for later use. Central energy production facilities will experience decreased sales and revenues. Central grids and local distribution grids will be relieved from heavy peak loads. Investments in increased transmission capacity can be postponed. But what does it mean if a TSO or DSO to looses 80% of their grid rental charges? If not 80%, even a 20% loss could be a dire challenge for local DSOs and their owners.
Decentralized renewable energy production and storage will soon revolutionize the energy sector. Energy produced, consumed and traded locally requires local energy markets. This is exactly what the EMPOWER project will develop: a new model for local energy markets and a software platform for local energy trading. The platform will be developed and verified at demo sites in Germany, Malta and Norway.
In St.Gallen, the EMPOWER project invites experts from its Technical Advisory Group and participants from the St.Gallen Forum to the EMPOWER TAG Workshop to be updated on the project’s status and to contribute to the next generation local trading platform developed by energy trading and software development teams who developed trading platforms for the Nordic Energy Markets.
- Prof. Bernt A. Bremdal, Norwegian Centre of Expertise Smart Energy Markets
- Erik Åsberg, CTO eSmart Systems AS
- Prof. Andreas Sumper, CITCEA - Universitat Politècnica de Catalunya