MSc Business Administration
Track: Digital Business
Master Thesis
Technological Innovations and Business Models
Shaping for the future: a case study of blockchain implementation in the Dutch energy sector
by
Tjeerd Schmit Jongbloed 11872403
June 2018 15 ECTS
Research conducted from January 2018 to June 2018
Supervisor: Assessor:
Statement of originality
This document is written by Student Tjeerd Schmit Jongbloed who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is
Table of Content
ABSTRACT ... 5
1. INTRODUCTION ... 6
2. LITERATURE REVIEW ... 9
2.1 THE BLOCKCHAIN TECHNOLOGY ... 9
2.2 BLOCKCHAIN IN THE ENERGY SECTOR ... 11
2.3 STAGES OF INNOVATION ... 13
2.4 DISRUPTIVE VERSUS RADICAL INNOVATION ... 14
2.5 THE BUSINESS MODEL CONCEPT ... 15
2.6 BUSINESS MODEL INNOVATION AND TECHNOLOGICAL INNOVATIONS ... 18
2.7 BUSINESS MODELS AND BLOCKCHAIN ... 21
2.8 RESEARCH AND SUB QUESTION(S) ... 22
2.8.1 Main research question ... 23
2.8.2 Elements surrounding the business model and blockchain implementation ... 23
2.8.3 Three strategy components of the business model ... 24
3. DATA AND METHOD ... 26
3.1 DESCRIPTION OF THE CASE STUDY ... 26
3.2 CASE SELECTION ... 27
3.3 RESEARCH INSTRUMENTS AND PROCEDURE ... 28
3.4 DATA ANALYSIS ... 29
3.5 RELIABILITY, VALIDITY AND LIMITATIONS ... 30
4. RESULTS ... 32
4.1 STAGES OF IMPLEMENTATION ... 32
4.2 FACTORS IMPACTING THE BLOCKCHAIN BUSINESS MODEL ADOPTION ... 33
4.2.1 Complexity of the Energy Sector ... 33 4.2.2 Complexity of the blockchain technology ... 34 4.2.3 Lagging legislation ... 35 4.2.4 Lack of incentives ... 35 4.3 VALUE PROPOSITION ... 36 4.3.1 Typology ... 37 4.4 THE RESOURCES ... 40 4.4.1 Typology ... 41
4.5 THE NETWORK PARTNERS ... 44
4.5.1 Typology ... 45
4.6 THE THREE STRATEGY COMPONENTS OF THE BUSINESS MODEL ... 48
5. DISCUSSION ... 50
5.1 RESEARCH- AND SUB QUESTION(S) ... 50
5.1.1 Stages of Implementation ... 50 5.1.2 Factors impacting the business model ... 50 5.1.3 The value proposition(s) ... 52 5.1.4 The resources component ... 53 5.1.5 The network partners ... 54 5.1.6 Sub conclusion ... 55 5.2 MANAGERIAL IMPLICATIONS ... 56 5.3 ACADEMIC CONTRIBUTIONS ... 57
5.4 LIMITATIONS AND FUTURE RESEARCH ... 58
APPENDIX I – IMPACT IOT ON THE BUSINESS MODEL ... 62
APPENDIX II (A) – SEMI STRUCTURED INTERVIEW – ENGLISH VERSION ... 62
APPENDIX II (B) – SEMI STRUCTURED INTERVIEW – DUTCH VERSION: ... 64
APPENDIX III – EXPLANATION OF STRATEGY COMPONENTS ... 66
APPENDIX IV – OVERVIEW OF CASES SELECTED ... 67
APPENDIX V – OVERVIEW OF NODES NVIVO ... 70
APPENDIX VI – GARTNER HYPE CYCLE 2017 ... 70
Abstract
This explorative research provides insights into the alignment of the three strategy
components of the business model to the introduction of the blockchain technology. These three strategy components comprise the ‘value proposition’, ‘the resources’ and ‘the network partners’. Based on the literature review, five sub questions have been formulated to answer the main question. Via semi-structured interviews, conducted among seven experts employed by incumbent companies in the Dutch energy sector, answers to these questions could be formulated. First of all, it is seen that all cases interviewed are not passed the pilot phase – indicating that the blockchain technology is not fully implemented in the business model. Moreover, four factors are identified that influence the implementation of blockchain. Lack of incentives (1), legislation (2) the complexity of the blockchain technology (3) and the
complexity of the energy sector (4) hamper the opportunities to make the blockchain technology an integral part of the organization. For the three strategy components, overarching typologies have been compiled and invigorating quotes are presented. It is possible that these typologies will change, since the blockchain technology is currently in development. However, at this point in time this research provides a holistic overview of how the incumbents in the energy sector currently align the three strategy components of their business models to the introduction of the blockchain technology. The results of this research can be used by managers to assess their own attitude and preparedness for implementing a new technological innovation, and more specifically the blockchain technology, into their business model.
Keywords: Technological Innovation, Blockchain, Business Model, Value Proposition, Resources, Network Partners, Typology
1. Introduction
In January 2009, the first cryptocurrency ‘bitcoin’ was introduced. From that moment
onward, popularity grew (Blau, 2018). In 2013, Coinbase –a bitcoin payment processor- sold bitcoins at a price of only $22. At the end of 2017, due to increased popularity and demand, it traded for prices over $20.000 per bitcoin but shortly after dropped over 40% of its value. It became the newest hype (Ruttenberg & Pinna, 2016), but what most of the people that join the buzz around bitcoin do not know is that there is a revolutionary technique behind it; the blockchain technology. Despite the fact that the bitcoin cryptocurrency is developed on the basis of the blockchain technology, Google trends shows that there is a massive difference in the amount of searches on bitcoin versus blockchain. Academics, journalists and an
increasingly amount of businesses, however, are starting to recognize the potential disruptive influence of the blockchain technology, sparking a lively debate on the topic (Holotiuk, Pisani & Moormann, 2017).
This new technology can be described as a distributed ledger that can provide the
framework for a (semi)decentralized type of database where all kinds of transactions and asset flows can be stored on a network of multiple (peer-to-peer) computers instead of one central server, facilitating immutability. The goal is to increase transparency, removing the need for central authority and reducing the amount of unnecessary third parties involved in a
transaction (Crosby, Pattanayak, Verma & Kalyanaraman, 2016).
Alongside this increased popularity, numerous news articles such as ‘Blockchain: The next big thing, or is it? (Economist) and ‘Davos: Blockchain can no longer be ignored (Financial Times) are published discussing the up- and downsides of the blockchain
technology. Similarly, short YouTube films explaining the blockchain technology in layman’s terms, or discussing the disruptive side of the blockchain technology are becoming countless. Logically, the amount of academic literature investigating the blockchain technology is rising
Table 1
Adapted version of the table presented by Zhao, Fan & Yan (2016) P.3. Showing the amount of publications on “blockchain”
Retrieved 15-06-2018
as well. Via advanced search on WebofScience and SSRN, it was possible to construct an overview of the total amount of articles published in 2016 and mid-2018. The results shown in table 1 clearly illustrates a significant increase, although the total amount of published articles is still minimal.
Year WebofScience SSRN
2016 15 101
2018 343 570
Interestingly, the topic ‘business models and blockchain’ remains almost unexamined (Risius & Spohrer, 2017). The business model concept, albeit its definition still under debate (Morris, Schindenhutte & Allen, 2005; Massa, Tucci & Afuah, 2016), provides a valuable unit of analysis for organizations to evaluate how it does business (Zott et al., 2011).
Moreover, Chesbrough (2010) emphasizes that it is important to constantly innovate business models alongside new technologies and ideas to maximize economic outcomes. He holds the position that a great technological invention exploited via a mediocre business model might be worth less than a mediocre technological invention exploited by a superb business model.
This highlights the importance of the accurate adaptation and design of business models when a new innovative technology is emerging. The aforementioned lack of research to the alignment of business models to the blockchain technology suggests that there is a gap in the literature. In this exploratory research, the focus will therefore lie on the impact of
technological innovations on business models, using the blockchain implementation in the energy sector as a case study.
At first, the current stage of blockchain implementation and potential factors deterring this implementation will be studied. This is followed by a thorough analysis of the alignment of
the companies’ strategy components, adapted from the integrated business model (Wirtz et al., 2016). These comprise the value proposition, the resources and network partners.
By answering the main research question “How do firms align the three strategy components of the business model to the introduction of a technological innovation?” this thesis aims to present a holistic overview of typologies, deemed indispensable for
implementing the blockchain technology. In addition, insights on the current stage of implementation and factors that currently play a role when implementing the blockchain technology are presented.
This study will build on the literature concerning the blockchain technology and its possible implementations, technological innovations, and the business model. The goal is to bring new insights regarding the proper construction and innovation of business models while implementing a new technological innovation. The demonstrated method might also function as a bases for future studies on the implementation of other technological innovations.
Managers will benefit from this knowledge when tackling the first hurdles in successfully implementing the blockchain, or any similar technology. If a consensus can be reached concerning the most important typologies, these can be used to update existent business models (incumbents), or to construct completely new business models (start-ups) to foster innovation and success.
In the next chapter, a literature review will be provided to amplify all concepts regarding the blockchain technology, technological innovations and business models. After that, the data and method chapter will focus on the research design, followed by the results of the study. Thereafter, a discussion of these results and the conclusion will be presented. Finally, the limitations, implications and an agenda for future research will be discussed.
2. Literature Review
This chapter provides an overview of the literature regarding the topics of the blockchain technology, technological innovations and the business model. The first topic that will be described, is the introduction of the blockchain technology including some examples of blockchain based implementations in the energy sector. This is followed by an analysis of the different stages and types of innovation. Then the business model theory will be analyzed, including the origin, definition of- and research on this model. The literature review will be concluded with the identification of the literature gap, and how the proposed research questions will contribute to the theory and practice.
2.1 The Blockchain Technology
In 2008 an anonymous person or group, under the pseudonym ‘Satoshi Nakamoto’, published the whitepaper: ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ arguing he could solve the double-spending issue by the introduction of a peer-to-peer network (Nakamoto, 2012). From that idea, the ‘bitcoin cryptocurrency’ emerged. Not long after that, experts realized that the underlying (peer-to-peer) blockchain technology used for the bitcoin could be separated from its original implementation and be used for all kinds of inter-organization cooperation
(Mendling et al., 2017; Gupta, G. 2017).
Vitalik Buterin, founding father of the ethereum project and one of the leading experts on the blockchain technology, defined the blockchain as: “a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all
previous states of every program are always publicly visible, and which carries a very strong cryptoeconomically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies.” (Buterin, 2015). Pilkington (2016) points out that Buterin, who refrains from using the often-heard terms such as ‘ledger’, ‘money’ or ‘transactions’ in this definition, highlights the essence of blockchain: that the
blockchain technology is informational and processual, and that it is not solely related to the monetary sphere and can thus be used for many other opportunities.
So, it is crucial for managers to understand that the blockchain technology is not just the bitcoin or any other cryptocurrency but rather a potential source of innovation (Crosby et al., 2016). In the literature and multiple consultancy reports, various possible use cases for different organizations and sectors are highlighted, showing potential solutions for financial services companies, the healthcare sector, Internet of Things and so on (Wörner, Von Bomhard, Schreier & Bilgeri, 2017; Gupta. M, 2017). Nonetheless, the immaturity of the technology daunts implementation in all sectors, making it uncertain whether implementation is feasible or not (Glaser & Bezzenberger, 2015). The current developments complicate this decision even further. Expected is that it will take at least 3 to 5 years before the potential impact of the technology can be properly evaluated (Gatteschi et al., 2018).
Moreover, it is likely that some of the current projects published online are falsely labeled as a blockchain implementation. Due to the developments of the technology, no formal definition has been established yet (Deshpande, Stewart, Lepetit & Gunashekar, 2017). Formally, the distributed ledger technology is the overarching definition that comprises all technologies facilitating a ledger which is distributed among everybody who participates (public) or merely a selection of the participants (private). In principle, the blockchain technology based ledger has to be publicly distributed. Most of the current ‘blockchain’ implementations consist of a privately distributed ledger, and therefore –officially- cannot be called a blockchain technology based project.
To prevent confusion however, all distributed ledger technology based projects discussed within this thesis will be labeled as a blockchain technology based solution.
2.2 Blockchain in the Energy Sector
For the energy sector, digitalization has also become ubiquitous. IoT, Blockchain and other digital possibilities enable the energy sector to become more decentralized, blurring the traditional energy sectors’ boundaries by the integration of buildings, mobility solutions and industry (Reinaud, Faraggi & Clinckx, 2017). Climate change forces steps to be taken towards more sustainability, whereby the Paris climate agreement signed in 2016 represents an
important stepping-stone in this process (Dütschke & Wesche, 2017). To reduce the
environmental impact of energy generation, new technologies were identified that rely more on renewable energy sources and less on fossil fuels. Though, the integration of power
generated from wind or solar poses challenges (Imbault, Swiatek, De Beaufort & Plana, 2017) and the increasing amount of privately owned renewable energy sources calls for new market approaches, including the potential incorporation of the blockchain technology (Mengelkamp, Notheisen, Beer, Dauer & Weinhardt, 2017).
Since the literature regarding the energy sector and blockchain still remains somewhat on the surface, the most extensive overview about the potential implication of blockchain for the energy sector can be found in the consultancy report ‘Blockchain – an opportunity for energy producers and consumers’, published by PricewaterhouseCoopers (PwC, 2016).
In this consultancy report it is observed that blockchain offers the potential of the decentralized storage of energy transaction data, the digitization of all kinds of energy contracts and the ability to verify transactions or execute trades within a ledger visible for all involved parties. Based on these possibilities, the potential of a transactive, decentralized, energy market is introduced where the amount of intermediaries participating in the energy market is reduced to the minimum, lowering prices for consumers.
One of the most prominent deployed proof of concepts is the ‘Brooklyn Microgrid’ or ‘Transactive Grid’. It offers a market to the so called prosumers, households that not only
consume but also produce energy. This proof of concept, started in April 2016, offers a community in the United States the opportunity to sell solar generated energy via a decentralized peer-to-peer power grid. All buildings participating in the project are
interconnected through the conventional power grid but the local transactions are managed and stored by the usage of a central blockchain and a smart meter (Zhang, Wu, Long & Cheng, 2017).
Within the Netherlands various transactive energy projects are tested as well. The first one that is gaining a lot of attention is the pilot initiated by Alliander, where all residents of Texel island have the opportunity to trade energy with each other. Due to the high amount of renewable energy sources, Tesla cars and one big factory, Texel island functions as a perfect testing location. The goal is to facilitate the residents with an autonomous grid, where it can still use the main grid for extra power supply during ‘tourist season’ peaks (Domingues, 2017).
Moreover, a collaboration between VandeBron and Tennet offers the owners of a Tesla car the opportunity to earn money by offering flexibility when charging their vehicle. The goal is to solve imbalances on the energy grid, costly for both the transmission system operator and the utility companies. When there is imbalance on the grid, all participating Tesla cars stop charging which results in a reduction in the demand of energy, making an effort to rebalance the grid. For future purposes, the possibility of using the battery of the Tesla car to supply energy back to the grid is currently being explored as well (TenneT, 2017).
Figure 1. Stages of technology implementation. Adopted from Groombridge et al. (2018)
2.3 Stages of Innovation
These examples of blockchain implementations are merely the top of the iceberg, showing the potential impact this innovative technology might have. Nevertheless, before the blockchain technology will fully impact the business, it has to be implemented first.
Already in 1971, Ozanne & Churchill highlighted that, before an industrial innovation was actually implemented, it had to go through five phases to test whether it would benefit the company. In a more recent framework, presented by Groombridge, Kandaswamy & Healey (2018) it is argued that a technological innovation follows four stages, depicted in figure 1.
The use case analysis phase entails the recognition of the innovation, and the analysis of what it may impose for a company. Based on these insights companies can build multiple use-cases. When it is recognized that a certain use-case might have viable implications for the business, a company can start a so-called proof of concept. A proof of concept is designed to exam the feasibility of a new technology, often conducted in a small environment. When the proof of concept is deemed successful and it is decided to move forward with the technology, it is taken to the pilot phase. The pilot phase is used to smooth out the last flaws, since the scaling-up of a solution may cause unexpected problems. When the pilot phase is successful, management can decide to take the project to full-live production. During this phase, the innovation becomes an integral part of the organization.
Where the implementations of the blockchain technology in the energy sector currently stand has yet to be determined. Until now only a few proof of concepts and even less pilots are published online, of which a few examples are discussed in section 2.2.
Nonetheless, the alignment of the strategy components and the blockchain technology remains a relevant topic to study. By using an exploratory approach, insights and scenarios can be gathered to prepare managers and provide researchers with certain handles to
investigate the impact of technological innovation, and blockchain in particular, on business models.
2.4 Disruptive versus Radical Innovation
Another interesting facet of innovation is the difference between disruptive- and radical innovation. While often treated the same, they are fundamentally different. Therefore, it is important to provide an overview of what these types of innovation entail to categorize the blockchain technology.
In short, disruptive innovation initially targets emerging niche markets and through the improvement of the performance it becomes sufficient to appeal to the mainstream market where it can replace existing products (Yu & Hang, 2010). An example of a disruptive innovation is the introduction of electrical cars, which started as an unpopular product but is now adopted by the mainstream market (Barkenbus, 2009).
Radical product innovation, however, is often targeted at the mainstream markets rather than supplying under- or unserved markets (O’connor, 1998). Typically, it represents a cutting-edge product that solves a particular problem that existing products cannot
(Govindarajan, Kopalle, Danneels, 2011). A good example is the introduction of the iPod, where all MP3 players were outsmarted by offering a superb experience and broad range of functionalities (Verganti, 2008).
Literature discussing the blockchain technology is referring to this technology as both a disruptive and radical innovation. Via advanced search, available on WebofScience and SSRN, table 2 was constructed to display the difference in usage of the terms blockchain, disruptive, and radical.
Table 2
Number of academic papers on blockchain including ‘disruptive’ and ‘radical’ in the abstract, keywords or title
Retrieved 15-06-2018
As displayed in table 2, the literature leans towards blockchain as a disruptive
innovation but does not yet fully agree on the exact classification. This could be, because it is too early to draw a conclusion what the blockchain technology will impose for society.
Although it is instigated in increased frequency, blockchain still needs a broad coordination to be widely accepted and implemented, just as how the underlying protocol of the internet, TCP/IP, became established (Iansiti & Lakhani, 2017).
Moreover, the potential ways of implementing the blockchain technology are numerous and can have different implications, one more radical or disruptive than the other (Swartz, 2017). Labeling it a disruptive or radical technological innovation is therefore still ambiguous and future research to the classification of the blockchain technology is needed.
For simplicity, though, throughout this study, the blockchain technology will be referred to as merely a technological innovation instead of a radical- or disruptive innovation. 2.5 The Business Model Concept
Nonetheless, both radical and disruptive innovations often instigate new players to enter the market to offer new business opportunities (Mendling et al., 2017) and force incumbents to engage in business model innovation (Christensen et al., 2015; Ross, 2009; Beck & Muller-Bloch, 2017). However, before business model innovation can be studied, the business model concept itself has to be introduced.
Although the business model concept was first familiarized in 1957 by Bell & Clark, it became more reputable alongside the arrival of the internet in the mid-1990s (Zott, Amit & Massa, 2011). From that point on, both scholars and business practitioners tapped into this
Term Web of Science SSRN
Blockchain 343 570
Blockchain and disruptive 9 36
subject forming different opinions about the business model. In the period between 1995 and 2000 a dramatic increase in the incidence of term usage in general management literature can be recognized, parallel with the popularization and expansion of the internet (Massa & Tucci, 2013). Initially, the business model terminology was closely connected with the rise of the first technology based companies and was considered to be a ‘buzzword’. However, it survived the dot-com bubble, and the focus changed from the ‘business model of internet companies’ to ‘business models of general businesses’ (Dasilva & Trkman, 2014).
This increased popularity led to the recognition of the business model as an important concept to nurture innovation and maintain competitive advantage. Based on the literature on technology management and entrepreneurship it is argued that proper business models are crucial for innovative companies to commercialize new ideas and technologies. Through the design of appropriate business models managers are enabled to unlock the results of research and development for new products or services and successfully connect it to a market (Massa & Tucci, 2013; Morris et al, 2005).
Still, various academics formed opinions about what the business model exactly entails. In 2017, Massa et al. published the paper ‘A critical assessment of business model research’ in which they advocate the view that, in the management literature, three
overarching interpretations of the meaning and function of business models have emerged. To provide a complete overview, these will be briefly reviewed.
The first interpretation they identified is the ‘business model as an attribute of the real firm’ – directly impacting the business operations. Within this interpretation, archetypes such as ‘freemium’ or ‘pay as you go’ are identified to describe certain business models. On the basis of these archetypes, organizations are often classified on their measured similarity of observed variables.
The second interpretation, ‘business model as a cognitive/linguistic schema’, holds the idea that the business model is rather unspoken, undetailed and implicit. It is argued that business models are most often inside the managers’ head (Nersessian, 2008) and that business models are communicated within the company through narratives, regularly used as a communication device (Magretta, 2002).
Lastly, ‘business model as a formal conceptual representation’ is somewhat situated in between the two previous interpretations and most relevant for this research. Within this interpretation, the business model is quite explicit and often written down. It is defined as a blueprint of how a company does business and shows how a business functions (Osterwalder, Pigneur & Tucci, 2005). This more formal conceptualization is often used to make it easier to deal with complex systems and other phenomena. By making sense of the complex business models it is often tried to simplify the distinction between relatively unnecessary elements versus important elements to improve understanding. Two popular ways of depicting such an overview via typologies are the ‘business model canvas’ (Osterwalder, 2004) and the four dimensions based business model (Gassman, Frankenberger and Csik, 2014).
These two approaches are examples of how the business model can be portrayed, but the literature investigating relevant components for business models is more widely
developed (Wirtz, Pistoia, Ullrich & Göttel, 2016). On the basis of 16 articles studying business model representation, Wirtz et al. (2016) created an overview of all the discussed components of the business model, identifying similarities of component usage in the analyzed articles. Based on the results of their analysis, they propose a new and more thoroughly grounded ‘integrated business model’ (figure 2) which can be used to provide a holistic overview of a business.
Figure 2. Integrated Business Model (Wirtz et al., 2016)
When the integrated business model is used to start- or reevaluate a business, all nine models are analyzed and defined after which they are often summarized via typologies. These typologies make it easy for outsiders to quickly asses a companies’ business model. 2.6 Business Model Innovation and Technological Innovations
The increased digitization, causing fundamental changes in almost all industries, led to the identification of the business model concept as the missing link between information technology, processes and the competitive advantage (Veit et al., 2014). Digital technology innovations, in all kinds of forms, transform the processes of entire industries, creating the urge for redesigned business models (Brynjolfsson & McAfee, 2014). This importance of the business model is empowered by the vision that technological innovations itself do not guarantee the success of a firm. Instead, a business model is often needed to create a
competitive advantage by capturing the value from the technological innovation and assuring its commercial success (Teece, 2010). In other words, business model innovation is a concept inevitable for any firm dealing with the introduction of new technologies.
More than twenty years before the business model concept was introduced in 1957, Schumpeter (1934) distinguished five types of innovation, of which one described as ‘new ways to organize business’, building up to what is now known as the concept of ‘business model innovation’ (Casadesus-Masanell & Zhu, 2013). Although sometimes labeled as complete reinvention of the current business model (Johnson, Christensen & Kagermann, 2008) business model innovation can be better described as the alteration of specific parts of the business model, commonly caused by the introduction of a new technology (Voelpel, Leibold & Tekkie, 2004). Internal and external changes most often require a firm to change or acquire value-adding components to capitalize on these changes. To secure a sustainable competitive advantage, a firm’s business models should therefore continuously be evaluated (Wirtz et al., 2016).
Investments in business model innovation for firms, sometimes radically changing the way they operate, can be complex and incur high costs. The introduction of new technologies frequently requires a new approach in commercializing the companies’ current assets, but also the development or acquisition of new resources is often needed. The threat of cannibalization of the firm’s existing business resources can impose barriers for business model innovations (Desyllas & Sako, 2013). These barriers are strengthened by the inertia of managers caused by the complexity of the needed reconfiguration of the business model (Massa & Tucci, 2013).
Not adequately identifying the impact of new technologies, and the failure to innovate the business model can have catastrophic consequences (Tripsas & Gavetti, 2000). This can be recognized in the failure of Nokia and Kodak who had to leave their market because they did not adapt their business models to a changed technological environment (Tripsas, 2009). Apple, in contrast, is a clear example of how continuous innovation of the business model, driven by technological change, can nurture stock growth and performance (Amit & Zott,
2012). This importance is also confirmed by a study among 765 CEOs conducted by IBM, where they identified business model innovation as the strongest driver of a sustainable competitive position (Pohle & Chapman, 2006).
For a firm, it is thus important that a new innovation delivers the envisioned value to the customer. The business model can mediate in that value creation process but discovering indispensable business model components for business model innovation is often constrained by uncertainty. Research can therefore be beneficial (Chesbrough & Rosenbloom 2010).
The introduction of the internet of things, for example, instigated multiple scholars to conduct research to adapted business models. Bucherer & Uckelmann (2011), Dijkman et al. (2015) and Fleisch et al. (2015) published an article titled ‘Business models for the Internet of Things’ researching alleged novel and important typologies of the business model for
successful internet of things implementation.
The most notable example is the exploratory article published by Dijkman et al. (2015) in which they investigate the most important typologies for implementing this new technology via the business model canvas. They interviewed experts active in various industries, via which they identified novel typologies needed for successful inclusion of internet of things technologies in their business processes. The most attention-grabbing components of the business model were ‘key activities, key resources and key partners and cost structure’ due to the high amount of (grey highlighted) typologies, which can be seen in appendix I.
In comparison to internet of things, the blockchain technology is still immature in its development and consequently little amount of research has been conducted to this concept, its implementation and on how business models will be impacted by this novel technology.
2.7 Business Models and Blockchain
Nonetheless, there are some articles that do address the issue of blockchain and business models, although mostly focused on the financial sector. To give an impression where the literature currently stands, a short summary of each article will be given after which the implications for this study will be explained.
The first article researches the impact of blockchain technology on business models in the payment industry, where banks and other financial institutions have to rethink their strategies and business models due to digitalization, including blockchain. By using a Delphi study, 45 experts participated to answer the research question “How does blockchain
technology impact current and new business models in the payment industry”. Three
important implications were derived from a three tier questionnaire; 1) blockchain allows for new services to be introduced, 2) it creates a great potential for new business models, making existing ones obsolete and 3) the industry will be impacted by new players due to their greater ability to leverage the potential of blockchain (Holotiuk et al., 2017).
Another study, published by Beck and Müller-Bloch (2017), tries to develop a
framework for engaging with distributed ledgers, which entails blockchain. They focus on the reaction of incumbent organizations, and the competencies needed to rethink their current business models due to this radical innovation. By constructing a case study, including several interviews with top managers of a large investment bank, they find that multiple firms are already fully engrossed in incubation and are moving towards acceleration. This highlights the importance of research to an appropriate aligned business model in order to reap the fruits of this new technology.
Oh & Shong (2017) also try to understand the relationship between blockchain and business models of financial institutions, and which challenges it poses. By interviewing several ICT officers of major banks in Korea they find that blockchain has the possibility to
reduce or even remove the business models of existing financial intermediaries. As a result, the Korea Federation of Banks launched a blockchain consortium, including 16 banks, to study blockchain opportunities and threats for the sector.
Lastly, the article ‘Typology of distributed ledger based business models’ by
Rückeshäuser (2017) develops a characterization of different business models that are based on the blockchain technology. On the basis of eleven interviews, similarities became visible, and via the use of a morphological box, five types of distributed ledger based business models were defined. From these typologies, it is concluded that the emerged business models are not radically new, and already observed in other IT contexts such as cloud solutions. Still, there is a possibility that the blockchain technology has not unfolded fully to make an impact on the organizational levels identified by the business model key-features.
Although the research conducted by Rückeshäuser suggests otherwise, the other published studies highlight the importance to recognize the various opportunities and threats blockchain causes for business models.
2.8 Research and Sub Question(s)
As shown in table 1 in the introduction, research towards blockchain technology in the last two years significantly increased. In these publications, the need to explore the influence of the blockchain technology on business models is widely acknowledged. For example, Friedlmaier, Tumasjan & Welpe (2016) argue that “blockchain has the potential to disrupt many traditional business models.” (P.3571). This is confirmed by Lindman, Tuunainen & Rossi (2017), Mendling et al. (2017), Beck & Muller-Bloch (2017), Reinaud et al. (2017) and Risius & Spohrer (2017), who also stress the importance of understanding the influence of blockchain on business models in their research.
Interestingly, the relevant articles studying blockchain and business models,
Sub question 1: In what stages do the blockchain implementations in the energy sector currently stand?
Sub question 2: What factors play a role when companies align their business model to a new innovative technology?
vital to deal with the implementation of the blockchain technology on business model is yet to be discovered. This suggests that a gap in the existing literature exists. In the next sections, the research questions to investigate this gap will be explicated.
2.8.1 Main research question
By conducting a case study on blockchain implementation in the energy sector, with the research question “How do firms align the three strategy components of the business model to the introduction of a technological innovation?” a step will be made towards a better
understanding of business models, technological innovations, the blockchain technology and how managers and scholars can combine these concepts. This study has the goal to provide an overview of the typologies making up the three strategy components, which are deemed as indispensable by firms when implementing a technological innovation, e.g. the blockchain technology.
2.8.2 Elements surrounding the business model and blockchain implementation To assess these typologies, it is important to analyze the developments around the business model and the blockchain technology. Therefore, some general elements surrounding the business model and blockchain implementation in the energy sector will be investigated.
First, to determine whether the blockchain technology already impacts the business model, it is important to assess what kind of blockchain implementations various companies within the energy sector are currently deploying.
Also, it is likely that various factors might create a burden or slow down the
implementation of an innovative technology in a companies’ business model. Moreover, it is possible that these factors influence the typologies of the three strategy components.
Figure 3. Overview of the ‘strategic components’ (Wirtz et al., 2016)
Figure 4. Adaptation of the ‘strategic components’ to the ‘three strategy components’
Sub question 3: What are the blockchain technology based value propositions? 2.8.3 Three strategy components of the business model
After researching these elements, the focus will shift to the value proposition(s), resources and network partners of the business model. These components are a variation of the three strategic components defined within the integrated business model (Wirtz et al. 2016),
illustrated in figure 3 and 4. Although almost equal, this adaptation has been made to limit the focus of this study, and at the same time make it better understandable for the readers less familiar with the integrated business model proposed by Wirtz et al. (2016).
In the following sections, a more thorough explanation of the three strategy components will be provided to highlight what the typologies will comprise. After each explanation, extra sub questions, in addition to the main research question will be posed.
1) The Value Proposition
The first strategy component is labeled ‘Value Proposition(s)’. For this component, a company tries to describe how the new business model is planned to satisfy their customer’s needs. They have to decide how they want to appear on the market, in other words, be perceived by its customers. Because these steps often involve many financial risks, the company has to take their medium and long-term goals into consideration.
Sub question 4: Which resources are needed for successful implementation of the blockchain technology?
Sub question 5: What are the important network partners for successful blockchain implementation?
2) The Resources
Secondly, the focus shifts to the resources. This component comprises the core
resources and associated competencies which are deemed relevant for the newly defined value proposition(s). It includes both tangible and intangible input factors, important for doing business. The introduction of a new technology can cause new resources to be acquired, existing resources to be retrained and unnecessary resources to be divested.
3) The Network Partners
Lastly, research will be conducted to the most important network partners. This last component provides an overview of a companies’ associates vital for executing the value proposition, functioning as an extension to the two other components. There is a possibility that a new value proposition offered to the customer requires the participation of new or existing external parties to achieve the intended value, for example by providing resources. Also, different forms of cooperation can be instigated to expand access to knowledge and resources.
Now that the literature has been analyzed and the research questions are defined, the research design- and method will be introduced. This is followed by the results of the study. Thereafter, a discussion of these results and the conclusion will be presented. Finally, the limitations, implications and an agenda for future research will be discussed.
3. Data and Method
In the previous chapter, an extensive literature review has been conducted in order to
strengthen the design and increase the ability to interpret the data that is to be collected (Yin, 2009). In the coming chapter the methods of this research will be elaborated upon, including the description of the study, the sampling strategy, selected cases, data collection, process of data analysis and research quality.
3.1 Description of the Case Study
Since the literature focusing on business models is still at an early stage of development, almost half of the published work on business models is explorative and case study based (Wirtz et al., 2016). In addition, the blockchain technology is also still immature, and will likely require broad coordination to be widely accepted and implemented (Iansiti & Lakhani, 2017). Due to the scarcity in academic literature and immaturity of both business model design and blockchain technology, this thesis will therefore be set-up as an exploratory multi-case study to provide new insights about these phenomena and context (Saunders, Lewis & Thornhill, 2012).
The choice for using a multi-case approach can be justified via the requirements set out by Yin (2009) as this study will focus on a contemporary set of events, over which no control can be taken. Through the use of an embedded multi-case study, the research will be more rigorous and robust (Herriott & Firestone,1983). Also, by following the replication logic, the study will be more feasible (Yin, 2009). This replication logic entails the assessment of each case as a distinct experiment to include all different viewpoints on the concepts researched (Eisenhard & Graebner, 2007). By replicating findings across cases reliability and generalizability is improved (Baxter & Jack, 2008).
The overall design of the case study will be cross-sectional, since this research will investigate multiple cases at a specific point in time (Saunders et al, 2012).
3.2 Case Selection
Firms operating in the energy sector, that are actively investigating the blockchain technology are both the unit of analysis and observation of this study. Among these firms, seven cases have been selected based on that they are representative or typical (Yin, 2009). For this study this can be defined as “An energy company with more than 250 employees operating in the Netherlands, investigating blockchain implementations”.
The sample comprises three types of corporations active in the energy sector. The first type encompasses the utility companies who are responsible for the energy trade and (not necessarily) generation. Within the Netherlands, forty utility companies are functional, of which eight are identified as incumbents including Engie, Nuon/Vattenfall, Eneco and E.ON (EnergiePortal, 2017). Also important within the energy sector are the transmission system operator (TSO) and distribution system operators (DSOs), which are accountable for the underlying grid. Within the Dutch energy sector, TenneT is appointed as the monopolist TSO to maintain the high voltage grid. For the DSOs, the Netherlands is divided among 7 entities of which Stedin, Enexis and Alliander operate almost 4/5th of the area.
Because this study focuses on a particular subgroup in which the members are similar, non-probability, purposeful homogenous sampling is selected to identify potential cases within the energy sector (Saunders, Lewis & Thornhill, 2012). This presents the ability to explore the firms operating in the energy sector in greater depth, and by using the
aforementioned replication logic the generalizability and reliability of the findings will be improved.
Personal contacts and the LinkedIn sales navigator tool were used to identify and approach the employees working for potential companies matching the aforementioned description. In the tables 3 and 4 on the next page, an overview of the selected cases is shown.
Table 4
Sample of transmission system operator (TSO) and distribution system operators (DSOs) Table 3
Sample of utility companies
To maintain conciseness, a short description of each company and interviewee is included in appendix IV.
3.3 Research Instruments and Procedure
To gather in-depth qualitative data, each case will consist of a semi-structured interview (Saunders, Lewis & Thornhill, 2012) conducted with an employee that is involved in the process of implementing the blockchain technology. These interviews will mainly be one to one, and take approximately 45 minutes. On the basis of Leech (2002), semi-structured questions (appendix II) have been prepared. Prior to each interview, a short introduction will be given to introduce the research objective to the interviewees (appendix III).
To prevent blame of potential lack of systematic handling of data, all interviews will be audio recorded and transcribed afterwards and made available for analysis upon request. Both the interviews and transcriptions will be processed in Dutch, as this is the preferred language for the interviewees. Within the results section, important quotes will be translated to English. In addition, extra sources, such as presentations or internal documents highlighting their progress with blockchain will be analyzed to facilitate triangulation, i.e. using different
Utility company Interviewee’s role Date interview Duration
Engie Blockchain Consultant 18-04 54 minutes
Nuon/Vattenfall Sr. Business Development - Blockchain
23-04 75 minutes
Eneco Lead Blockchain 24-04 44 minutes
E.ON Managing director – Agile
Accelerator
30-04 39 minutes
TSO & DSO Interviewee’s role Date interview Duration
TenneT - TSO Business Project leader Blockchain 01-05 45 minutes
Stedin - DSO Strategy Consultant 15-05 51 minutes
methods to arrive at a conclusion (Frese et al., 2012). By conducting a multi-method study, the credibility of the results will be enhanced and the potential for bias is reduced (Bowen, 2009).
At first a pilot test will be conducted among two fellow blockchain researchers to check whether the interview protocol is relevant for energy firms implementing blockchain. This is followed-up by one pre-test to exam whether the interview is possible to conduct within the predetermined time, is evidently structured and whether the questions are clear and not suggestive, i.e. eliminating flaws (Yin, 2009).
3.4 Data Analysis
For the data analysis, the stages described by Burnard (1991) will be followed to the highest extent possible. This entails the creation of notes and memos during the interview, and the transcription of each interview afterwards. The transcription of each interview will be read through in order to become more immersed in the data. On the basis of the information available from the interviews, headings are created to summarize informational elements. After analyzing all transcripts, these headings will repeatedly be grouped under so called ‘higher-order headings’, producing a final list.
Afterwards, the software Nvivo is used in the process of coding, which is commonly used and accepted among researchers to analyze the data (Johnston, 2006). The goal is to separate the ‘dross’ from the meaningful information, valuable for the results. Via the use of the headings (e.g. nodes), the interviews will be worked through, assigning evocative
information to the headings. All the coded material provides an important overview of the information necessary to write up the results. The coding will be done to the best extent possible, since there is no holy grail for the analyses of qualitative data, or the way it should be coded (Saldana, 2012).
These results, presented in the next chapter, will be underpinned by the degree of support among the respondents. Due to requests for anonymization, most of the illustrative quotes used to invigorate the results will be unsigned.
3.5 Reliability, Validity and Limitations Reliability
By minimizing the errors and bias in this study, reliability is improved. This will be done by facilitating high methodological transparency, so that others can reproduce the same findings when the same procedure is used (Frese et al., 2012). However, one must take into account that with qualitative research circumstances can change and different results might be found when repeated later on. Especially with the high amount of developments changing the blockchain technology (Gatteschi et al., 2018) it will likely increase this risk.
Validity
There are two types of validity that have to be considered when conducting research. First the internal validity, which deals with the search for causal relationships (Yin, 2009), important for explanatory or causal studies. Since this thesis has an explorative focus, this lies outside the scope.
Secondly, external validity has to be taken into account - “Defining the domain to which the study’s findings can be generalized” (Yin, 2009 p. 46). For the energy sector, the use of a multi-case study benefits this generalizability. However, whether the studies’ findings can be generalized to dissimilar sectors and countries has to be proved through replicating the findings for firms in the energy sector of other countries, and firms operating in other sectors. So, due to the relatively small sample and the usage of non-random sampling overall external validity is considered to be mediocre.
Limitations
The selected sample provide a good cross-section of the energy sector. However, by selecting more cases, the rigorousness of the results can be improved. Moreover, it focused exclusively on incumbent organizations. Therefore, a broader sample including smaller companies can produce different insights currently left unexplored.
Also, it is possible that the interviewees are biased. All employees interviewed are commissioned to analyze the implementation possibilities of blockchain, increasing the possibility that they are more positive about its potential to justify their own work. Still, it seemed that they were also able to note the drawbacks of the blockchain technology, refraining from calling it the holy grail and implying that further research is important.
Sub question 1: In what stages do the blockchain implementations within the energy sector currently stand?
4. Results
In the following chapter, insights obtained via the interviews and secondary sources will be discussed. In appendix V an overview is presented of the final list of nodes, established by following the steps described in section 3.4. On the bases of these nodes, it was possible to perform a cross-case analysis, easing the ability to assess certain interrelationships,
differences or patterns among the various cases (Miles & Hubberman, 1994).
By analyzing the cases certain similarities and differences came to light, providing a holistic overview of how companies, operating in the energy sector, align the strategy components of their business model to a new technological innovation, in this case the blockchain technology.
Since the sub questions have been formulated in order to answer the main research question, these results will be presented first. At the start of each section, the research question will be repeated to invigorate the results gathered.
4.1 Stages of Implementation
To measure the extent of blockchain implementation and the associated impact on the business model, the companies were asked to define to which degree blockchain projects are currently deployed within their organization.
Based on the statements, the conclusion can be drawn that no corporation has made a blockchain based project an integral part of their organization yet. Instead, all four utility companies are not even passed the proof of concept phase. The system operator companies are more advanced in their development, with two pilots commenced by Alliander and TenneT. A graphical overview of the current advancements of all cases is shown in figure 5.
Although no corporation has a blockchain based solution implemented within their organization, all companies did engage in the process of analyzing various use-cases
Figure 5. Overview current stages of implementation of the cases selected
Sub question 2: What factors play a role when companies align their business model to a new innovative technology?
describing how the blockchain technology could play a role. On the basis of their analysis, they have chosen certain projects to develop, and are now currently engrossed in testing their proof of concept or pilot project. As their main goal, all companies highlight that they are following these stages to acquire knowledge of what blockchain really is, and how it can benefit future projects to solve problems. One interviewee mentioned: “With our pilot project we could prove the potential of a transactive energy system, that we might need in the future”
4.2 Factors impacting the Blockchain Business Model Adoption
Before the three strategy components can be analyzed, it is important to asses surrounding factors that can slow down the introduction of an innovative technology in a companies’ business model. During the interviews, four major factors came up during the process of blockchain adoption into the business model.
4.2.1 Complexity of the Energy Sector
The accelerated energy transition, fueled by the Paris agreement in 2016, is causing the general complexity of the energy sector to expand. First of all, the goal to ban out fossil fuels increases the number of electrical powered devices. This includes electrical cars and bicycles but also heating boilers and cooking stoves that used to operate on gas. One of the
interviewees highlighted: “Due to the removal of gas, the electricity usage might even quadruple”. Secondly, the closure of polluting power plants increases the need for inclusion of prosumers and energy cooperatives investing in renewable energy sources.
Due to this increased complexity, various new issues are projected to play a role. The utility companies expect difficulties in assessing energy usage and production, which could lead to (costly) unbalance on the grid. For the system operators, so called ‘congestion on the grid’ could become a major issue. To solve these issues, the prosumers and consumers have to become more involved, which leads to a redesign of the traditional roles.
On the one hand, this complexity deters the implementation of the blockchain technology. The underlying system facilitating energy is not that simple so that it can easily be replaced by a newer and better optimized version running on the blockchain technology. On the other hand, it requires broad coordination among all players currently maintaining the electricity supply. Due to the increased complexity and cooperation it is expected that there will also be an increase in transactions and flows of data, for which blockchain might be the appropriate solution.
4.2.2 Complexity of the blockchain technology
Another factor that plays a role, is the complexity of the blockchain technology itself. Almost all experts interviewed indicate that the technology is young in its development and is not stable and scalable enough to implement it into day-to-day business. This is caused by the broad range of different ‘blockchain’ alike versions. All these versions are still in the process of development and the choice for a certain blockchain technology differs from one company to another. During one of the interviews it was highlighted: “We employed all kinds of
blockchain technologies, such as Hyperledger during a hackaton, Ethereum for our demo and Tendermint for our PoC. Which one will be the standard in ten years? I have no idea…”
The recent introduction of smart-contracts (ethereum) and chain-code (hyperledger) reduces some of the complexities, but there are still many hurdles to be taken such as the energy consumption in the process of ‘mining’. A solution to these problems might be the ‘Energy Web blockchain’, currently in development and described as “an open-source,
scalable blockchain platform specifically designed for the energy sector’s regulatory, operational, and market needs.”.
4.2.3 Lagging legislation
Another bottleneck that came up is the impact of legislation. According to an interviewee, “law always follows innovation”. At this time though, instigated by the major challenge to ban out fossil fuels, the government does offer considerable room to experiment. By
experimenting, both the corporations and the government can learn what might be needed in the future to implement a more transactive, hybrid and flexible energy system.
Nonetheless, the law does not yet offer room to engage in full-live production. This is not necessarily focused on the blockade of using blockchain technology, but rather about the solutions which are made possible because of the blockchain technology.
- “From a legal point of view it is a drama”
-“Currently, the legislation is not ready for peer-to-peer energy solutions”
-“Although the legislation is not yet prepared to fully implement transactive energy solutions, there is considerable room to experiment”
4.2.4 Lack of incentives
The last factor deals with the lack of incentives; i.e. financial gains or other benefits a company can acquire when implementing a new technology.
For the transactive energy solutions described in section 2.2, a subsidy is currently eradicating incentives to further explore these options. This subsidy, provided by the Dutch government, provides solar panel owners financial benefits to stimulate purchasing of these panels. In the coming years, this law is planned to be replaced but right now, the peer-to-peer proposition is not feasible for both the consumer and the utility company. A statement was: “The current subsidy deters financially benefiting peer-to-peer energy trade, this in
Sub question 3: What are the blockchain technology based value propositions?
Moreover, the current energy infrastructure in place, owned and maintained by the system operators, is still able to deal with the increased usage of electricity. Because this might change in the future, they do have the incentive to experiment - but not necessarily the incentive to implement at this time. “Besides two or three bottlenecks, the current grid is still able to deal with the increased complexity of the energy sector”.
4.3 Value Proposition
Now that it is clear how the cases selected are actually implementing the blockchain technology and what the influencing factors are, we can shift the focus to the first strategy component: the value proposition(s), as can be seen in figure 5 (p.24).
When defining the value proposition, a company tries to describe how it will satisfy the customers’ needs by introducing a new technology or product. Within the value proposition in the energy sector, a clear separation can be recognized in how the blockchain technology is aimed to create value for the customers.
1) Optimization of background processes
The first categorization entails the use of blockchain as a mean to optimize current processes. These “not so sexy” solutions comprise various processes that deal with more than two parties. An example is the process of allocation and reconciliation where multiple parties involved in the transmission of energy from the source to the customer have to settle on the differences between their individual ledgers. Other examples are the processes that deal with provenance of assets, certificates of origin and billing. By implementing blockchain
2) Transactive energy solutions
The second categorization comprises the transactive energy solutions, promoting a more transactive and intelligent energy industry. These solutions will likely increase the involvement of the end customer. Individual households and businesses are encouraged to become more involved in the process of buying and supplying electricity within the energy market. For these kind of implementations all interviewees highlight that it is not about the core technology, but about what benefits it provides for the users via applications or similar solutions. This means that these applications should run on an ‘invisible’ blockchain
technology based system in the background. To promote the potential usage, it is suggested that these solutions should either provide benefits to those actually interested in where their energy comes from. Or, for those who just simply want energy, it should all be about simplification so that the benefits outweigh any trouble.
4.3.1 Typology
As discussed in section 2.5, the business model is often summarized via typologies. These typologies highlight the essence of the three components, making it easier to comprehend for an outsider.
On the next page, an overview of the typologies is shown in figure 6, summarizing the two value propositions described above. The typologies came up during the interviews either via the question to name those which came to mind, as well as via deduction of what the interviewees told about their projects and the aimed implications. Due to confidentiality, it is not explicitly shown which companies support what typology. However, the total number of support is shown between the brackets.
Figure 6. Overview of the typologies summarizing the two value propositions
For each typology, a short explanation and multiple anonymous quotes will be presented to provide a better understanding of what it entails.
1. Transparency:
Better traceability of energy, information flows and data creates a more transparent system. Better cooperation between the parties involved in the energy ecosystem, facilitated by this new technology can solve problems such as ‘grey’ energy and reconciliation procedures. Besides, transparency is also one of the main characteristics of the blockchain technology itself.
-“You can finally see that that green energy is actually green”
-“It makes everything more traceable, which can be monitored by those who are interested” -“Transparency is where blockchain stands for, I believe that people are in need of more access and insights”
2. Cost Reduction:
Because blockchain can cause many steps operated by humans to disappear, the costs of energy can go down by implementing the blockchain technology.
-“It is a cost saving technology, which reduces the paper trail and associated labor costs” -“The blockchain based solutions will incur a cost reduction in comparison to the old systems, which will benefit our customers”
-“One of our goals is to deliver the electricity as cheap as possible to the customers, where blockchain has the potential to remove unnecessary costs”
Value Proposition(s) 1. Transparency (7/7) 2. Cost Reduction (5/7) 3. Simplification (5/7) 4. Sustainability (4/7) 5. Involvement (7/7) 6. Decentralization (7/7)
3. Simplification:
It is highlighted that the blockchain technology merely operates as a base layer. The applications operating on this layer must provide the customer with the most convenient opportunities to buy the energy they want. Also, due to the decentralized nature of
blockchain, the technology can facilitate increased and more transparent cooperation between the various players in the ecosystem – reducing the complexity of the energy sector.
-“It is all about how you offer customers a helping hand, how do you solve unwanted complexity”
-“An important aspect for customers is the easiness of the product or solution” -“Blockchain can help us make the energy sector less complex”
4. Sustainability
Via the blockchain technology, certification of green energy can be simplified. Besides, the transactive energy systems promotes local usage, which will optimize the utilization of electricity increasing sustainability as well.
-“Blockchain can benefit the generation of true green energy. The potential of simplified certification will promote both consumption and generation”
-“It is our goal to deliver green energy to every household as smart as possible.Blockchain can be a solution”
5. Involvement
Both value propositions are likely to increase the involvement of the customer. For the first value proposition, the implementation of blockchain in the green certification process provide the customer to be involved when selecting their power source. For the second value
proposition, comprising the transactive energy solutions, more involvement for the customer is facilitated as well. Examples are the local trade of energy and the opportunity to offer flexibility.
Sub question 4: Which resources are needed for successful implementation of the blockchain technology?
-“It is not about energy for everybody, but the energy system of everybody – people can select their own sources or sell energy to who ever they want”
-“People have to opportunity to earn money by offering flexibility with their electrical devices” -“By offering these kind of solutions, the customer will hopefully become more involved in the whole energy system – more engaged”
6. Decentralization
Almost all interviewees predicted a decentralized energy system as the future for the energy sector. These transactive, decentralized, energy systems, can currently be divided into the peer-to-peer energy trade such as the pilot operated by Alliander and the solutions to provide flexibility with electrical devices which is tested by TenneT using Tesla cars, described in section 2.2.
-“A transactive energy system will come into place one-way-or another, now we have to think how we can offer our customers the best value”
-“These kind of peer-to-peer solutions will not be established before 2020-2023, due to lagging legislation, lack of incentives and so on”
-“We are exploring the opportunity to add the capacity of individuals their Tesla to our primary, secondary and tertiary reserves to be able and balance the grid”
4.4 The Resources
The value proposition(s) defined, can require the change- or divestment of existing resources, or the generation and acquisition of new ones. In this section, crucial resources for successful implementation of this new technology will be put apart.
First of all, it is likely that various existing resources will disappear when the blockchain technology is implemented. The technology offers the opportunity to automate processes which are currently operated manually. Moreover, the blockchain technology does not seem to differ that much from existing IT systems. Therefore, except for new knowledge,
