Valuing energy futures; a comparative analysis of value pools across UK energy system scenarios
File(s)
Published version
Author(s)
Hardy, JJE
Hall, S
Sophie-Wegner, M
Workman, M
Type
Journal Article
Abstract
Electricity markets in liberalised nations are composed primarily of private firms that make strategic decisions about how to secure competitive advantage. Energy transitions, driven by decarbonisation targets and technological innovation, will create new markets and destroy old ones in a re-configuration of the power sector. This research suggests that by 2050 up to 21 bnGBP per year of new financial value is available in the UK electricity system, and that depending on scenario, these new values represent up to 31% of the entire electricity sector. To service these markets business model innovation and new firm strategies are needed in electric power provision. Energy scenarios can inform strategic decisions over business model adaptation, but to date scenario modelling has not directly addressed firm strategy and behaviour. This is due in part to neo-classical assumptions of firm rationality and perfect foresight. This research adopts a resource based view of the firm rooted in evolutionary economics to argue that quantifying the relative size of the markets created and destroyed by energy transitions can provide useful insight into firm behaviour and innovation policy.
Date Issued
2017-09-08
Date Acceptance
2017-08-26
Citation
Applied Energy, 2017, 206, pp.815-828
ISSN
0306-2619
Publisher
Elsevier
Start Page
815
End Page
828
Journal / Book Title
Applied Energy
Volume
206
Copyright Statement
© 2017 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/BY/4.0/).
License URL
Sponsor
Economic & Social Research Council (ESRC)
Grant Number
ES/M500562/1
Subjects
09 Engineering
14 Economics
Energy
Publication Status
Published
Date Publish Online
2017-09-08