Session 6: Business Model Innovation: Learning from Examples

May 8th, 2018

In some cases, business model innovation can be the key to catalyzing the growth of new technologies in the marketplace, especially when competition is increasing. For instance, leasing schemes have enabled the explosive growth in the rooftop PV market. In other cases, increasingly affordable technologies such as energy storage and digital services enable more effective use of renewable energy sources like solar PV, and create new business models, like the virtual power plant. In this session, we will discuss innovative business models, with a focus on what can be learned from them, and whether such models are transferrable and scalable (i.e. can be readily expanded to other markets and/or technologies).


Session Chair: Andrew Jeffries, Director, Energy Division, Southeast Asia Department, Asian Development Bank


Dany Qian, Global Vice-President, JinkoSolar

Raising IRR and Profitability in the Renewables Industry

The renewable energy sector is both rapidly changing and growing, as component and deployment costs continue to fall. Accompanying these price decreases are the materialization of complementary technologies such as smart energy solutions and storage. To further complicate the mix, there are also some major changes in the policy, such as the liberalization of energy trading in the People’s Republic of China. All these different forces will disrupt the existing business models in renewables. This presentation will focus on how existing renewables companies should capitalize on the disruption and further increase both the IRR of their businesses and the projects in which they are involved in.

Liu Yang, Senior Fellow, Energy Studies Institute, National University of Singapore

Integrating Solar Photovoltaics and Storage into a Long-Term Energy Technology Portfolio: Business Models Innovation and Lessons from Singapore

Limited land space and high intermittency remain key constraints to the mass deployment of solar in Singapore. Recent technological advancements in energy storage systems and virtual power plants have opened up new opportunities for solar in this small island state. Such developments are accompanied by shifts in policies, such as the Smart Nation Program. This presentation will focus on business model innovation to reflect the values of solar PVs, storage and virtual power plants in Singapore’s electricity market. The experience of policy making to support the viability of different business models will be transferable to other ASEAN countries.

Ronald Sastrawan, Senior Risk Analyst, Munich Re

Reliable Warranty Insurance: A Key Metric of Sustainable PV Projects

PV module warranties from insolvent suppliers are a problem in today’s solar industry. The long warranty period of 25 years, combined with today’s competitive market environment, results in a high probability that PV projects will be left alone with useless warranties in the future. Therefore, in order to ensure a PV project’s sustainability, it is necessary to have an insurance company back-stop the module supplier’s warranty. This presentation will describe the most important aspects of insurance structures, which governments and regulators should be aware of, when designing their policy and regulatory framework. By ensuring that the correct insurance is in place, the warranty risk for PV can be mitigated adequately. The presentation will explain the meaning of dedicated and non-dedicated limits, assignability, and reliable indemnification, and also how to avoid choosing an inadequate insurance structure, which is crucial to governments and regulators when designing tender requirements.

Stephanie Hay, Principal Consultant and Networks & Innovation Team Lead TNEI Services Limited

Integration and Investability of Renewable Energy in “Islanded” Grids

This presentation will explore technical, commercial and economic considerations for the integration of renewable energy in “islanded” grids based on case studies. Power system modelling can be used to characterize grid loading and stability to quantify the impact of renewables on frequency and voltage control and identify mitigation solutions such as voltage regulation and energy storage. This presentation will describe the benefits of a pragmatic, impact assessment approach will be presented. The “investability” of renewable energy in “islanded” grids will be explored through a review of viable business models that have been deployed to provide energy access to remote communities. Key success factors and enablers for investment will be explored from both investor and beneficiary perspectives. This presentation will also assess the role that local, regional and global political economy play in enabling and unlocking such investments.