Business Models for Clean Power: Improving Financial Viability of Distributed Energy Resource Projects

Abstract

The Indian electricity market is poised to undergo a paradigm shift in line with India's climate change mitigation commitment. As India sets to achieve its renewable energy targets, it is faced with a challenge to counter the variability and reliability issues associated with renewable sources of energy. Distributed Energy Resources are necessary in this regard, as they provide ancillary services and capacity reserves among other applications. The electricity distribution companies (DISCOM) in India have poor financial health. This prevents the undertaking of renewable projects, as they are deemed financially unviable. Distribution sector reforms relating to Tariff structure and Power Purchase Agreements have been widely discussed to improve the financial viability of the DISCOM. Identifying suitable business models for the distribution utilities thus becomes critical and is the core objective of this dissertation. The Business Model Ontology is employed to structure the arguments and corresponding business model recommendations have been the output of this study. Three major categories of DER namely - Demand Response/ Energy Management Services, Energy Storage and Solar PV have been perused as part of this study.