Discussion Papers

Christine Müller, Andrea Schweinsberg

From smart grid to smart market – the potential of platform-based interaction

No. 364 / Januar 2012

(Full version only available in German)


Increasing energy demand, dwindling fossil energy resources and climate change have led to political objectives to reduce CO2 emissions and to increase the share of renewable energy sources (RES). This will considerably affect the energy system and substantially change its structure. An ICT-based connection of the different levels of the value chain offers the opportunity to new players to enter the system and the emergence of new business models. This may lead to new, platform-based interaction opportunities linking the different players in the value chain. Hence, the objective of this discussion paper is to analyse these interaction arrangements both from a theoretical and a practical perspective.

The theory of two-sided markets is a suitable theoretical framework to describe platform-based interactions, understand their patterns and analyse network effects. Taking the example of four E-Energy model regions, the current practical approaches are analysed. All model regions feature a particular E-Energy market place simulating platform-based interactions based on regional distinctions.

The analysis yields approaches that are very heterogeneous. This is proven by the diverse understanding regarding the definition of the interface between regulated and competitive activities. Basically, a distinction can be made between approaches dominated by the network operator (model region Mannheim, moma) and approaches dominated by the market (model regions eTelligence, MeRegio, and RegModHarz). 

Taking a wide look at the present situation demonstrates that the essential challenge consists in redefining the interface between competitive and regulated parts of the value chain in a transforming energy system. Moreover, this includes the definition of roles and responsibilities and incorporating them in consistent incentive schemes in order to facilitate promising business models. This requires a critical compatibility check with the regulatory regime. 

The potential benefit of platform based interactions is to perspectively yield a more efficient resource allocation and therefore an optimisation of the energy-political target triangle (sustainability, efficiency and security of supply). However, at the moment no quantifiable appraisal regarding the benefit of platform based interactions is possible.

Discussion Paper is available for download.

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