SCENARIOS FOR DISTRIBUTED ENERGY SYSTEMS AND NEW BUSINESS CONCEPTS

1. ’Business as usual’ ’Supportive legislation’ ’Plug and play’ ’Green heaven’ SCENARIOS FOR DISTRIBUTED ENERGY SYSTEMS AND NEW BUSINESS CONCEPTS PURPOSE AND AIMS PROJECT STATUS AND RESULTS • To form a holistic description of the technological and business development opportunities and threats in the distributed energy generation in different scenarios • To define the future scenarios and business value networks in the distributed energy systems till the year 2019 • To study developing the technology from the point of view of new operational models • To assess, analyze and define the opportunities in utilizing the technologies especially with regard to services -Two scenario sessions have been held with the Specialists and Actors in Lappeenrantaon 10-11 August 2004 and in Espoo on 30 September 2004. New business ideas found in the sessionswere evaluated on the basis of scenarios with the Specialists in the GDSS laboratory at LUT. -Technology Report on potential DE technologies on 10 January 2005 -Scenario Report on future business on 28 January 2005 THE FRAMEWORK OF THE RESEARCH PROJECT Present energy generation systems Challenges of the dynamic business environment Potential in distributed energy generation The first session held in Lappeenranta produced preliminary future scenarios for distributed energy systems. Particular emphasis was put on the business environment and related factors. On the basis of the scenarios by the Actors (DENSY program administration) the outlook of the DE business is rather positive. Presentations of the themes on the four scenarios can be found enclosed. Scenarios for distributed energy systems New business concepts for distributed energy systems BENEFITS FOR COMPANIES • Assessing the development opportunities in the services in distributed energy systems • Discovering the future R&D trends and the potential in the current and prospective technologies PERSONNEL REALIZATION OF THE RESULTS FACTS AND FIGURES Project organization Research Director: Professor Tuomo Kässi Project Manager: Researcher Jukka Bergman Figures Duration: 05/2004 – 12/2005 Extent: 55 man-months www.tbrc.fi/projects.php Business ideas and R&D needs related to the distributed energy systems were identified and defined in an innovation process utilizing the scenarios. The best business ideas will be developed further as accurately as possible to produce nearly complete operational models. Scenarios will be utilized througout the planning of projects and selecting the project proposals in the DENSY program. Professor Tuomo Kässi Professor Jarmo Partanen Researcher Jukka Bergman Researcher Mika Lankila Researcher Petja Rinne PROJECT in 2005 THE PROJECT PARTNERS: -The project future scenarios and technology study have been conducted by Specialists in close cooperation with DENSY program administration (Actors). -Future business concepts for the selected technologies and targeted market areas will be developed, and further projects to be launched will be prepared with companies. -Research funding by TEKES, the National Technology Agency of Finland IF YOU ARE INTERESTED, PLEASE CONTACT Jukka Bergman, bergman@lut.fi, +358 5 621 6652 Tuomo Kässi, tuomo.kassi@lut.fi, +358 5 621 2602

2. TEKES - DENSY • The scenarios of distributed energy generation and their impact on business models • The premises of the distributed energy business • The results of the scenario process • Preliminary results of the business development Jukka Bergman

3. Premises for the distributed energy business • - Enormous energy generation potential of distributed energy systems • - Environmental problems • - Environmental regulation • - Applications of existing technologies in new situations to create new business • - Increasing population • TECHNOLOGY: DENSY-seminaari Vaasa 2005_Prem.ppt Jukka Bergman

4. ENERGY CONSUMPTION Services (huolto, kunnossapito) Distributed Energy Generation (Components systems and services) Energy Resale Energy Distribution Energy Market (e.g. electricity exchange) Energy generation ENERGY SOURCES (Fossil and renewable sources) The changing value chain VALUE CHAIN OF THE DISTRIBUTED ENERGY SYSTEMS

5. Scenario process • Alternative Scenarios • Technologies and business opportunities • Analysis of the Results

6. Energy-Eldorado Large Units The Law of the Jungle Forced opened market Business as usual Supportive Legislation ’Plug and play’ Green Heaven Undeveloped Infrastructure Scenarios Developed Infrastructure Developed Infrastructure Open Market No regulation Tight regulation Regulated Market Undeveloped Infrastructure The frameworks of the scenarios in the year 2019 Triggers: Tiggers_200905.ppt

7. Differences between the scenarios No regulation -Necessary and import to the society energy production is controlled -The best and cheapest solution wins the game -No regulative control Tight regulation -Do no threat the centralized energy systems and business -Business started with the help of authors -supportive regulation for the DE business 1. The level of the control of the authors Open Market -Totally open business driven markets -Authors will not make any interventions -Customer driven business Regulated market -Imperative regulation towards the DE -Producers fulfill the minimum demands of the regulator -DE is only a subsidiary business (to please ’green groups’) 2. Differences of the scenarios between the experts and the actors .

8. Assessment of the scenarios PLAUSIBILITY (uskottavuus) (direction of the change of the industry) DESIRABLE (haluttavuus) (Success of the company in the future with the existing resources) Least Plausible Most Plausible Worst Most Desirable The scenarios: 1 = Business as usual –Scenario 2 = Supportative legislation –Scenario 3 = Green Heaven –Scenario 4 = Plug and Play –Scenario Triggers: Tiggers_200905.ppt

9. R&D and Future Business: Power plants Components IC solutions Energy Systems Consulting services Energy Storaging Wind Bio Solar Peat Waves Hydrogen Waste Future system and component business opportunity areas The focus of the R&D in the future The scenarios: 1 = Business as usual –Scenario 2 = Supportative legislation –Scenario 3 = Green Heaven –Scenario 4 = Plug and Play –Scenario

10. The future business opportunites Systems in energy generation Systems in networks Machines and components Services The most promising business areas for the Finnish companies The scenarios: 1 = Business as usual –Scenario 2 = Supportative legislation –Scenario 3 = Green Heaven –Scenario 4 = Plug and Play –Scenario

11. Business Idea Generation in the GDSS Customer Business Concepts Services Systems Components (12 ideas) (8 ideas) (17 ideas) R & D (20 ideas) Others (2 ideas) Premises: DENSY-seminaari Vaasa 2005_TRE.ppt

12. Analysis: • - DE business will develop with the help of the supportive legislation. • - ”The Plug-and-Play” scenariowould be aWildcard when the most flexible and agile companies will succeed. • - New business models will develop around the existing technologies using them : • in a novel way, • for new targets, • in emerging markets. • - Only the new business models make it possible to exploit the emerging business opportunities (technology is only the enabler) • - According to the survey, Companies expressed their readiness for the future changes if they are not too rapid. •  ”Doing things to the way they always been done!”

13. Millainen olen? Minne halua? • Ennustaja – luottaa todennäköiseen. • Riskinottaja – valitsee ”parhaan” lopputuloksen • Riskinkarttaja – muotoilee strategian, jolla selviää kaikissa vaihtoehdoissa • Realisti – kehittää joustavuutta siltä varalta, että joku muu kuin valittu skenaario toteutuu • Tulevaisuuden tekijä – vaikuttaa omilla teoillaan niin, että haluttu vaihtoehto toteutuu • Teuras – odottaa ja toivoo (Meristö&Kettunen, 2003) Triggers: Tiggers_200905.ppt