For the UK to meet carbon reduction targets and achieve clean growth ambitions, the transformation of the energy system may require radical business models enabled by new market arrangements.
Energy Systems Catapult supports technological innovation but also the development of Business Model Innovation to ensure high-growth potential businesses are built on the foundations of economically viable business models.
The Challenge and Opportunity
Transforming the UK energy system to be clean, secure and affordable, requires integrating and optimising solutions and innovations from a range of previously separate systems including power, heat, transport, and across the physical, digital and market systems.
Start-ups and SMEs face a range of challenges engaging and accessing an historically conservative and risk-averse energy sector. A number of these challenges have been highlighted by the joint Energy Systems Catapult/Energy Innovation Centre (EIC) report on barriers, based on responses from 157 SMEs, “Insights: Helping SMEs to access the energy industry”, published in May 2017.
Innovative solutions must be considered from all relevant aspects – technology, people, policies, regulation, business models, market mechanisms and much more.
Many high-growth potential innovations fail to reach market or achieve scale because their businesses are not built on the foundations of economically viable business models.
Energy Systems Catapult has developed a Business Model Innovation capability to help the development of innovative commercial solutions, and to ensure that ideas under development already address all the facets of a successful business model.
The Business Model Innovation team can work with business/SME/Innovator at various stages of business model development, which will be informed by the type of activities undertaken. At one end of the spectrum, we may work around the problem-solution space with high volume, low fidelity prototypes, where at the other end of the spectrum we might be looking at the business model to market alignment, by validating some key proof points about a model to support producing an investor pack, or identifying a need to reorient a model.
Our Business Model Innovation team works directly with innovators in the Incubator and Accelerator tiers of our Innovator Support Platform. We also work with businesses partnering with the Catapult on specific projects.
The Business Model Innovation team’s approach may involve:
- Early engagement with a business/SME/Innovator on behalf of the Innovator Support Platform to understand their business model, as part of the knowledge transfer process;
- Generating innovative business models with a business/SME/innovator that currently have an innovative technology or idea but not a viable business model;
- Calling on one or more other Catapult capabilities or assets, such as Consumer Insight, Policy and Regulation, Dynamic Energy System Simulation, etc. to assist with business model innovation work.
As business models define how costs and revenue will accrue, as well as identifying how value is delivered to the customer, the Business Model Innovation team is well placed to work through holistic market scenarios from a Whole System perspective.