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Valuing energy futures; a comparative analysis of value pools across UK energy system scenarios

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Title: Valuing energy futures; a comparative analysis of value pools across UK energy system scenarios
Authors: Hardy, JJE
Hall, S
Sophie-Wegner, M
Workman, M
Item 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.
Issue Date: 8-Sep-2017
Date of Acceptance: 26-Aug-2017
URI: http://hdl.handle.net/10044/1/50579
DOI: https://dx.doi.org/10.1016/j.apenergy.2017.08.200
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/).
Sponsor/Funder: Economic & Social Research Council (ESRC)
Funder's Grant Number: ES/M500562/1
Keywords: 09 Engineering
14 Economics
Energy
Publication Status: Published
Appears in Collections:Centre for Environmental Policy
Faculty of Natural Sciences



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