Future Business Model for Cellular Microgrids

Malik Intisar Ali Sajjad, Roberto Napoli, Gianfranco Chicco


Different studies which were carried out in the past revealed that the environment for microgrids is very complex and uncertain due to regulatory and legal barriers. Across and within the developed countries the suggestions and views of regulatory authorities and legal bindings about the infrastructure and operation of microgrids are quite different. According to the present scenario, the viability of microgrids mainly depends upon how microgrids are framed, who owns them, which are the customers served from them and how much revenue is generated from them. This paper investigates the potential barriers in current business models to deploy microgrids and proposes a business model, centric to users, with the concept of consumers owned microgrid.


  1. Becker, B., 2013 (13 March). Microgrid Challenges: Moving Beyond Pilots. Microgrid World Forum, Irvine. CA.
  2. Bork, P., Jensen, L.J., von Mering, C., Ramani, A.K., Lee, I., Marcotte, E.M., 2004. Protein interaction networks from yeast to human. Current Opinion in Structural Biology, 14(3), 292-294.
  3. Caramanis, M.C., Bohn, R.E., Schweppe, F.C., 1982. Optimal Spot Pricing: Practice and Theory. IEEE Transactions on Power Apparatus and System, PAS101(9), 3234-3245.
  4. Center for Energy, Marine Transportation and Public Policy at Columbia University and Hyams, M.A., 2010. Microgrids: An Assessment Of The Value, Opportunities And Barriers To Deployment In New York State. NYSERDA.
  5. Enos, J.L., 1962. Petroleum Progress and Profits: A History of Process Innovation. MIT Press, Cambridge, MA.
  6. Eppstein, D., Goodrich, M.T., Löffler, M., Strash, D., Trott, L., 2013. Category-based routing in social networks: Membership dimension and the small-world phenomenon. Theoret. Computer Science, 514, 96- 104.
  7. Franke, N., Shah, K.S., 2003. How communities support innovative activities: an exploration of assistance and sharing among end-users. Resear. Policy, 32, 157-178.
  8. Franke, N., von Hippel, E., 2003. Satisfying Heterogeneous User Needs via Innovation Toolkits: The Case of Apache Security Software. Research Policy, 32(7), 1199-1215.
  9. Freeman, C., 1968. Chemical Process Plant: Innovation and the World Market. National Institute Economic Review, 45, 29-51.
  10. Galvin Electricity Initiative, What are some examples of smart microgrids. http://galvinpower.org/resources/ microgrid-hub/smart-microgrids-faq/examples, 20/01/2014.
  11. GEA Writing Team, 2012. Global Energy Assessment: Toward a Sustainable Future. Cambridge Univ. Press.
  12. Herstatt, C., von Hippel, E., 1992. From Experience: Developing New Product Concepts Via the Lead User Method: A Case Study in a “low tech” Field. Journal of Product Innovation Management, 9, 213-221.
  13. Hidefum, S., 2013. Structuring Hierarchical Multi-Star Small-World Networks for Real-World Applications. Procedia Computer Science, 18, 2410-2419.
  14. Kelly, J. F., Meiners, M., Rouse, G., 2007. IIT Perfect Power Prototype. Galvin Electricity Initiative, Illinois Institute of Technology.
  15. King, D.E., 2006. Electric Power Micro-grids: Opportunities and Challenges for an Emerging Distributed Energy Architecture. PhD Thesis, Carnegie Mellon University, http://wpweb2.tepper.cmu.edu/ceic, (20/01/2014).
  16. Lucas, R.E., 1988. On the mechanics of economic development. In Journal of Monetary Economics, 22(1), 3-42.
  17. Luthje, C., Herstatt, C., von Hippel, E., 2002. The impact of use experience and knowledge on innovations: An empirical study of innovative activities among endusers. MIT Sloan School of Management.
  18. Luthje, C., 2004. Characteristics of innovating users in a consumer goods field: An empirical study of sportrelated product consumers. Technovation, 24(9), 683- 695.
  19. Morrison, P.D., Roberts, J.H., von Hippel, E., 2000. Determinants of User Innovation and Innovation Sharing in a Local Market. Management Science, 46(12), 1513-1527.
  20. Pagani, G.A., Aiello, M., 2013. The Power Grid as a complex network: A survey. Physica A: Statistical Mechanics and its Applications, 392(11), 2688-2700.
  21. Renewable Policy Network for the 21st Century (REN21), 2013. RENEWABLES INTERACTIVE MAP. http://www.map.ren21.net/, (20/01/2014).
  22. Renner, S., Albu, M., van Elburg, H., Heinesmann, c., Lazicki, A., Penttinen, L., Puente, F., Saele, H., Feb. 2011. European Smart Metering Landscape Report. Österreichische Energieagentur - Austrian Energy Agency (AEA), Vienna.
  23. Romer, P.M., 1990. Human capital and growth: theory and evidence. Carnegie-Rochester Conference Series on Public Policy, 32, 251-286.
  24. Romer, P., 1986. Increasing returns and long-run growth. In Journal of Political economy, 94(5), 1002-1037
  25. Russell, M. D., Sagoo, B., 2013 (September). A Holistic Microgrid Energy Management System for Improved Energy Efficiency and Renewable Integration. Microgrid Symposium - Santiago, Chile.
  26. Schweppe, F.C., Tabors, R.D. and Kirtley, J.L, 1981. Homeostatic Control: The Utility/Customer Marketplace for Electric Power. MIT Energy Lab. Report, MIT Press, MIT-EL 81-033.
  27. Schumpeter, J.A., 1934. The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle. Harvard University Press, Cambridge, MA.
  28. Shane, S. A., 2003. A General Theory of Entrepreneurship: The individual-Opertunity Nexus. Edward Elgar Publishers.
  29. Solow, R.M., 1957. Technical Change and the Aggregate Production Function. Review of Economics and Statistics, 39, 312-20.
  30. Urban, G. L., von Hippel, E., 1988. Lead User Analyses for the Development of New Industrial Products. Management Science, 34(5), 569-582.
  31. von Hippel, E., 2005. Democratizing Innovation. MIT Press, Cambridge MA.
  32. Warshay, B., 2013 (14th March). Microgrids in Remote Applications: Data Centres, Developing Regions, and Military Installations: Innovative Approaches for Electrification in Developing Regions. Presentation. Microgrid World Forum, 2013, Irvine, CA.

Paper Citation

in Harvard Style

Sajjad M., Napoli R. and Chicco G. (2014). Future Business Model for Cellular Microgrids . In Proceedings of the Fourth International Symposium on Business Modeling and Software Design - Volume 1: BMSD, ISBN 978-989-758-032-1, pages 209-216. DOI: 10.5220/0005426202090216

in Bibtex Style

author={Malik Intisar Ali Sajjad and Roberto Napoli and Gianfranco Chicco},
title={Future Business Model for Cellular Microgrids},
booktitle={Proceedings of the Fourth International Symposium on Business Modeling and Software Design - Volume 1: BMSD,},

in EndNote Style

JO - Proceedings of the Fourth International Symposium on Business Modeling and Software Design - Volume 1: BMSD,
TI - Future Business Model for Cellular Microgrids
SN - 978-989-758-032-1
AU - Sajjad M.
AU - Napoli R.
AU - Chicco G.
PY - 2014
SP - 209
EP - 216
DO - 10.5220/0005426202090216