TECHNOLOGICAL AND MARKET ASSESSMENT OF THE INNOVATIVE BUSINESS MODELS FOR DEMAND RESPONSE IN THE EUROPEAN BUILDINGS

Purpose: This paper presents innovative business model that incorporates the demand response (DR) schemes to the ESCO projects. So far, despite financial barriers, DR aggregators have not cooperated with ESCOs which offer financial support for energy renovations. Thus, the paper describes the first joint business model and assesses technological and market opportunities for its practical implementation. Design/methodology/approach: Technological assessment of the business model was based on CANVAS model and focus group interviews (FGIs) conducted with 31 DR aggregators and ESCOs in 2016 in Portugal, Serbia, Spain and UK. Market assessment was conducted basing on quantitative study from 2015 with 112 European Energy Performance Contractors (EPC) who were asked about financial and technological aspects of the renovations. Findings: The optimal peak demand DR scheme minimizing potential peak loads was designed, with close attention to the activities that should be taken by DR aggregators and ESCOs to jointly offer this solution on the market. Moreover, the study identified target markets (mainly Southern Europe) and found that the motivation of building owners to implement the innovative solution is influenced by the pressure to reduce energy costs. Research/practical implications: The results show how the DR aggregator and ESCO could create joint market strategy for renovation with the implicit DR scheme. They also suggest which markets and drivers should be considered while implementing the business model. Originality/value: This was the original study which evaluated technological and market opportunities for incorporation of the DR solutions to the ESCOs activities, including strong attention to the communication infrastructure, smart metering devices and users' behaviours.