Question: Could you shortly describe the topic of your work package part?
Answer S. Ulli-Beer: This WP02 is about the socio-economic perspective on integrating technical solutions for heating and cooling in Switzerland. It is about creating value for the whole “business ecosystem.”
Question: Could you describe what a “business ecosystem” is?
Answer M. Speich: Such an ecosystem consists of a set of individual and independent organizations that work together with a common goal. In DeCarbCH, the common goal is to decarbonize the heating and cooling systems most efficiently and cost-effectively. The different organizations will reach this goal by contributing, for example, knowledge, technology, funds, and other resources.
S. Ulli-Beer: In addition, such an ecosystem involves many actors in the value network, including planners, manufacturers, installers, government, customers, etc. An important question is how value creation opportunities give the actors incentives to work efficiently together. Business model innovation is a keyword to streamline the activities in the ecosystem. In DeCarbCH, we specifically address both the industrial and building sectors.
Question: How does it relate to DeCarbCH?
M. Speich: Compared to the technology-oriented WPs, which provide use-specific, tailored technological solutions, our role is to facilitate their integration into application contexts and accelerate the market penetration. This is an interdisciplinary collaboration task. We will jointly define and analyze use cases to find feasible and customized solutions for the concrete application context.
Question: What are the main objectives?
S. Ulli-Beer: The main objective is to identify promising policies and business models for public and private actors in the business ecosystem. Our goals are to evaluate the impact of these strategies on the context-specific market uptake of clean heating and cooling technologies. This will help evaluate how the market penetration can be accelerated and how the decarbonization goals can be met in time under given socio-economic conditions. For example, what incentive systems would help, and how tariff models should be designed.
Question: What are the main research questions?
M. Speich: One major task is to look at the situation today, especially the specific needs and value system of the actors. We will analyze how they work together today and how this is changing in the future. This work will be accomplished empirically by interviewing the actors and linking the collected data with previous literature and planning documents. The focus of the case studies and partners is clearly on Switzerland, but also considering ongoing research in other European countries. The research will include developing a simulation model to test different business models, tariff models, policies, etc., under uncertainty.
S. Ulli-Beer: First, we will define a suitable case study and then assess the existing “pains.” One focus will be district heating networks: we will look at tariffs and heat sales to customers in cities. We are interested in fair tariff systems because different technical solutions lead to different costs: is a harmonized tariff system feasible, and how would it impact the different actors?
M. Speich: Talking about fairness, this will play a central role in the discussions with potential technology providers of heating solutions. The aim is to develop fair tariff models that work in practice.
S. Ulli-Beer: We will try to support the actors in effectively achieving decarbonization goals in a dynamically evolving business environment. We provide directions on how actors can valorize opportunities of innovative decarbonization solutions.
M. Speich: Indeed, the ecosystem is dynamically complex and depends on numerous time-dependent parameters and future expectations. Among others, it depends on the policy context, the number of customers and their heat demand, local conditions of the building structure (in a city or district), market factors (technologies spread in the market, time to switch to the new technology), technology specifications (heat delivery capacity, cost of the technology, life cycle), and finally the supply side (energy prices, tariff system, etc.). All of these will change over time and influence each other.
Question: What are the main expected outcomes of your WP?
S. Ulli-Beer: We will show concrete perspectives of business ecosystems and distinct innovative business models: Who needs to be involved in the system? Who does what? What is the added value of each? First, this will show under what conditions decarbonization can become a no-brainer in the best case. Then, with the help of a simulation model, we will evaluate under which conditions decarbonization is realized in time.
M. Speich: We will give guidance to the public authorities at federal, cantonal, and municipal levels to set the proper framework to achieve the decarbonization goals.
S. Ulli-Beer: All actors must be encouraged to act and learn, and incentives must be created to manage risk. Applying roadmapping, we will show how this process should be orchestrated.
Question: Could you provide some examples to illustrate the specialty of your WP?
S. Ulli-Beer: As mentioned before, promoting the spread of technologies includes finding the right incentive systems, e.g., a fair heat tariff. From previous studies on the costs and benefits of electricity from PV systems, we know that a certain grid tariff favors the spread of PV systems so that the fixed costs of the electricity grid are paid. The situation is similar with the district heating system. Here, too, it is necessary to distribute heating costs fairly. For example, from a consumer point of view, it does not matter where the heat comes from because the benefit per kWh of heat is the same.
Question: A final word for our readers?
S. Ulli-Beer: We are very happy to work with the technology experts of DeCarbCH and show the business ecosystem actors how they could make money out of innovative decarbonization solutions.
M.Speich: In addition, we provide guidance to public authorities on how appropriate governance can steer value-creating activities towards reaching societal goals.
