Business Opportunities in Renewable Energy – Some Cases and Recent Studies 17.3.2015, klo 15.30 – 16.00 Ville Tuomi, Training Manager, PhD, University of Vaasa Levón Institute 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 1 Aim • The aim of this presentation is to consider what kinds of business opportunities there are in renewable energy business. This is done with the help of some Finnish cases of solar energy and wind power. 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 2 What are business opportunities and where can we find them? • Business opportunities are possibilities for companies to make business. – opportunities in the operating environment of companies – internal characteristics of companies (competencies, technologies used in companies and strategies of companies). • There are also always some kinds of barriers which prevent the development of business. • In the field of renewable energy business in Finland, we refer to bureaucracy, taxation and phase of development of technology as major barriers for business development • there are also some competences in the companies which could be developed to more utilize the business opportunities. 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 3 How to Find Business Opportunities? There are two main ways to find business opportunities: • Analysis of operating environment • Analysis of a company, for example business model of a company 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 4 Business Opportunities in Supply Chains Raw mate rials 30.3.2015 Production Distri bution Project Mana gement Installation Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi Sales Service s ….. 5 Business Model • Business model refers to the way a company is making business as a whole. It is a frame of reference used, when we want to analyse business in practical level. • A business model describes the way a company is doing business and it consists of the following factors – Offering – Issues connecter to markets: who are the customers and how a company is creating value for customers (i.a. what are the benefits for the customers) – Competences and competitive edge – Differentiation of a company (competitive strategy) – Economical issues (how to get money) – Targets of a company (Morris et.al. 2006, 34–36). 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 6 Different kinds of priorities concerning energy issues (Aslani 2014, 117) 30.3.2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 7 Renewable Energy • energy from renewable sources’ means energy from renewable non-fossil sources, namely wind, solar, aerothermal, geothermal, hydrothermal and ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases (DIRECTIVE 2009/28/EC) 30.3.2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 8 Some Recent Cases Renewable Business Barriers for What to Energy opportunities business develop in business models of companies? Wind Tariffs are still Bureaucracy Competences there (legal to cope with issues) bureaucracy Solar 30/03/2015 Technology development in the (near?) future Authorities functioning in practice Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi Customer interface Offering (Tuomi et. al 2015) 9 Some Comparisons to Other Countries • Empirical evidence has shown that successful development of the renewable energy business doesn’t rely solely on governmental financial support. • Innovative business models have fostered the development of the renewable energy business, winning also new markets, while collaboration models have lead to high capital investments in new technologies that would improve the efficiency of renewable energy generation in the future. • Green clusters have received awareness from both private and public sectors and have evolved to a new symbiotic model based on resource efficiency, economies of scale and economies of scope (Chinie 2014). 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 10 Some Comparisons to Other Countries • The main differences in using renewable technology between the two continents, Africa and Europe, are the level of development, exploited renewable energy, and the available technology. • The governmental programmes can support community understanding and acceptance of the new technology. • These initiatives have to be adjusted to community needs and the available resources in the territory. (Pollman et al 2014). • To compare this in the situation in Finland, we could assume, that social acceptance, governmental steering and available technology are key factors affecting to the development of the use of renewable energies. 30/03/2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 11 Conclusions • To put it simply, all the companies should utilize their business opportunities and find ways to cope with barriers for business. • At least the following development is assumed to be beneficial for companies: – competences to cope with bureaucracy • Taxes are constantly changing, and tarrifs may change • Municipalities differ from each other – development of customer interface – development of offering 30.3.2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 12 Some references • • • • • Aslani, A. & Feng, B. (2014). Investment Priorization in Renewable Energy Resources with Consideration to the Investment Criteria in Iran. Distributed Generation & Alternative Energy Journal. Vol. 29, Iss. 1, pp. 7-26. Chinie, A. C. (2014). Current concerns and trends in the business of renewable energy. Management Research and Practice, 6(4), 5-22. DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC Pollmann, O., Podruzsik, S., & Fehér, O. (2014). Social acceptance of renewable energy: Some examples from europe and developing africa. Society and Economy, 36(2), 217-231. Tuomi et al (2015) Cases from opportunities and challenges in Osthrobotnia and Finland to business connected to renewable energies. Unpublished report from the project financed by the Center for Economic Development, Transport and the Environment in Ostrobothnia. 30.3.2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 13 30.3.2015 Vaasan yliopisto | Levón-instituutti | Kalvosarjan nimi 14