Sustainable business models for social innovation: The case of renewable energy cooperatives

The European Union has set its goal to produce at least 20 percent of the gross final consumption of energy from renewable energy sources by the year 2020. This ambitious measurement was taken to reduce the anthropogenic GHG emissions in order to mitigate the consequences of climate change. The economic and technical oriented strategies to accelerate renewable energy implementation have shown little success in the inclusion of renewable energy technology as a main harvest of energy. In the Netherlands, the energy sector has a history of a top-down energy system with generation and distribution of energy from fossil fuels. For the last decades, private energy companies were the only project developers of renewable energy projects. The top-down decision-making has been tagged as being unfair at the moment of allocating costs and benefits towards local communities where energy projects are developed.As a result, a growing number of communities have organized themselves as renewable energy cooperatives (RECs) to provide a bottom-up and collective solutions to their local needs and global environmental issues. Renewable Energy Cooperatives (RECs) are a bottom up group of actors that adopted a cooperative in a legal and organizational form who invest in renewable energy projects. There is a present need to recognize the balance of environmental, social and economic benefits and costs of RECs and so, we need to understand the real impact these organizations create beyond the rhetoric. The main research question is posed as How do RECs generate and manage social, environmental and economic value and what are the lessons learned for RECs and its main stakeholders? Drawing on current literature, this research empirically dives into the identification of social, environmental and economic values that are created on behalf of these organizations. Furthermore, this research is interested in determining how negative value creation is managed against the creation of positive value. This research makes use of the theory of sustainable business models to develop the analytical framework. Bocken et. al (2015) developed a basic framework which was further conceptualized and adjusted for the REC business models. The inclusion of mission & vision, knowledge as value, strategic network, innovative roles & practices, value missed and value destroyed. Additionally, this sustainable business model framework recognizes a wider definition of value and a larger range of stakeholders that accommodate to answer the main research question. The analytical framework also serves as a tool to collect data and process the gathered information. The empirical research consists in the study of four diverse renewable energy cooperatives in the Netherlands with diverse business model. Type of members, technology used, value chain and lifetime were the different criteria used to select the four cases. Each was analyzed separately and later compared in a cross-case analysis. The main findings include that RECs create and destroy value in the social, environmental and economic dimensions of sustainability. Democracy, conservation of the natural environment,autonomy and procedural justice, are some of the values that are created and captured by stakeholders in the socio-technical system of RECs. As these organizations prioritize social and environmental value creation, the economic value captured is used as a mechanism to mitigate the social value creation. Acceptance of renewables and conservation are the consistent values destroyed among RECs. Wind energy projects have demonstrated to be value-laden projects as they create and destroy more value than solar energy projects. Finally, collaboration with energy companies has demonstrated to yield unique value creation in terms of innovation and competence. The main research question is complete by developing recommendations to RECs, policymakers and energy companies, which are considered to be key actors around the practice of RECs. The framework developed in this research is proposed as a tool to maximize the value creation of RECs.Technology, Policy and ManagementEngineering Systems and Service