Timing-based business models for flexibility creation in the electric power sector

Energy policies in many countries push for an increase in the generation of wind and solar power. Along these developments, the balance between supply and demand becomes more challenging as the generation of wind and solar power is volatile, and flexibility of supply and demand becomes valuable. As a consequence, companies in the electric power sector develop new business models that create flexibility through activities of timing supply and demand. Based on an extensive qualitative analysis of interviews and industry research in the energy industry, the paper at hand explores the role of timing-based business models in the power sector and sheds light on the mechanisms of flexibility creation through timing. In particular we distill four ideal-type business models of flexibility creation with timing and reveal how they can be classified along two dimensions, namely costs of multiplicity and intervention costs. We put forward that these business models offer 'coupled services', combining resource-centered and service-centered perspectives. This complementary character has important implications for energy policy. - Highlights: •Explores timing-based business models providing flexibility in the energy industry. •Timing-based business models can be classified on two dimensions. •Timing-based business models offer 'coupled services'. • 'Coupled services' couple timing as a service with supply- or demand side valuables. •Policy and managerial implications for energy market design.