An investigation into energy as-a-service (EaaS) business model in facilitating Australian energy transition

A shift in customer energy consumption based on finite energy sources towards the adoption of renewable energy sources that maximise the opportunities available from increased energy efficiency and better management of energy demand – in other words, energy transition – has been recognised as an imperative need. Often this is viewed as a technological problem but increasing attention has been given to research on non-technological components such as end-user practices and types of offers and services of energy they purchase. Built on the conventional volume-based linear energy value chain starting with fossil-fuel-based generators and transported via centralised energy networks to energy customers as an undifferentiated commodity, the relevance of the energy utility business model (BM) which is still dominant in serving the property sector energy needs is being questioned under current energy transition conditions. On the other hand, this has also led to an increased presence of distributed energy resources (DER) in energy markets with an invasion of new BMs challenging the conventional energy utility market. As such, energy transition depends on how new BMs propose to deliver and capture value beyond existing energy utility BM that would then result in a decentralised and decarbonised energy system. However, literature on customer and service providers operating within the property sector inquiring about specific DER-based new BMs facilitating energy transition is still not clear. More specifically, this research is focused on addressing this literature gap with an exploratory investigation in the context of Energy-as-a-Service (EaaS) BM. EaaS BM covers a wide range of multifaceted offers such as energy efficiency and demand management services and enables the adoption of renewable and decentralised energy sources built on partnerships and relationships with third-party vendors. Whilst EaaS is expected to grow in coming years, the literature around EaaS activities and actor perspectives remains open. This research endeavours to investigate the development of EaaS BM in facilitating Australian energy transition with three objectives; 1) to synthesise EaaS types within a BM framing (from a commercial property sector perspective), 2) to analyse service provider and customer perspectives on driving and constraining conditions for EaaS deployment in the commercial property sector, and 3) to investigate what changes can be done to the development of EaaS at the energy system level from the energy demand side (commercial property sector) perspective. Qualitative data collection and analysis methods are adopted in addressing these objectives whilst the scope of the empirical investigation is limited to stakeholders in the commercial property sector (energy service providers and customers) representing demand side (or customer side) energy transition in the context of EaaS. In achieving the first objective the study empirically synthesises EaaS BM characteristics under four types – green energy supplier (GES), functionality provider (FP), grid optimiser (GO) and platform facilitator (PF). These EaaS types allow service providers to configure a mixture of several energy products and services in offering value propositions, different financial models in value capture and different ways of value delivery. EaaS types are more likely to succeed where both customer (and prosumer) and energy systems enjoy the benefits synergistically. Given the emerging trends of digitalisation, decarbonisation, and decentralisation, although introduced as four types, these EaaS types are converged already to some extent and may experience further convergence in the future. Similar to emerging market trends, different actors engaged in EaaS (i.e., EUCo, ESCo and customers) also influence this level of convergence or deployment. From a property sector perspective, these actor influences are analysed under financial, functional, organisational and market conditions in achieving the second objective of the study. As such, the degree of combination around the aspects of the proliferation of renewable energy sources enables decentralised energy consumption. Technological developments for energy services innovation and the level of complexity in customer energy requirements will encourage service providers and prosumers (as service providers) to deploy EaaS by combining the economic and environmental aspects and characteristics of customers. This is also an indication that whilst EaaS BM may represent a strong fit for an entity looking to establish an energy company, it might also be a potential fit for a specific set of customers. Nevertheless, with the existing energy transition, the configuration of the energy system is inevitably likely to become more complicated and interconnected. Considering this intricacy with the development of new BM, more specifically EaaS, this research investigates customer interactions with energy system levels and service provider capabilities to integrate different customer values into the energy system and network developments and associated DER integration implications under the third objective outlined. As such, desired functions of a future decentralised and decarbonised energy system should reward customers considering integrating value-added services to their energy supply and service providers' understanding of how customers want to produce and use the energy within their properties going well beyond techno-economic characteristics which are often used to define energy system transitions. The service provider's capability to offer a win-win solution for both customers and the service provider depends on provisions available for non-discriminatory access to customer information, or in other words, a level playing field for competition offered within the energy system. This research builds upon the existing scarce literature about EaaS and adds valuable insights to the body of knowledge in three different ways. Firstly, this research has collated diversified peer-reviewed and industry literature in the context of EaaS and identified its applications to the property sector. Secondly, this study has added empirical evidence to the existing body of knowledge about the specific ways in which EaaS can be established, the driving and constraining conditions for different EaaS types, and by positioning EaaS BM within the energy system, how the broader environment affects the development and how that might influence the potential role it could play in the transition to a more decarbonised and decentralised energy system. Thirdly, compared to the lack of qualitative data (or studies) exclusively about EaaS, the empirical investigation conducted in this study is noticeably more in-depth, combining the undertaking and analysis of a large body of qualitative data and more diverse primary literature.