Social business model for sustainable energy - Danish community energy
Summary
This study is initiated by the observation of two phenomena in literature: social business and community energy. The community energy was studied as the grassroots social innovation responding to sustainable energy transition by promoting the engagement of civil actors in the renewable energy setups. Meanwhile, the notion of social business implies a new business form that engages in social missions to capture and deliver social values. The two phenomena share not only the same exhibition in the social embeddedness but also business characteristics since the community energy is guided to enter the energy supply market, directly competing with incumbent energy utilities. However, the understanding of mechanisms for creating, capturing and delivering social values from community energy is still lacking. The thesis aims to deliver a systematic operationalization of community energy by conceptualizing social business in the context of community energy. Four case studies in the Danish community context were analyzed on the components of the social business model, including value proposition, value constellation, social profit equation, and economic profit equation. Based on the findings from the investigation of the four cases, it is concluded that the conceptualization of social business can be reflected in the context of community energy. Their emergence is driven by social and environmental concerns such as the promotion of local empowerment in energy supply, regional development, the reduction of greenhouse gas (GHG) emissions and replacement of fossil fuel resources. Strong community engagement plays a critical role in project emergence and implementation. It reflects on efficient and transparent management of project operators and democratic decision-making process with the involvement of local actors to stimulate project development. The case studies found different financial means to maintain the operation. Most of them rely on the revenue of energy sales to be self-sustained, however, the commitment of the local community to the financial duties of the project proves a more sustainable business model.