Business models for district heating
Although district heating (DH) as a technology has shown considerable competitive attractiveness, it is a delicate task to develop an efficient, profitable, and customer-oriented district heating firm. Even in mature markets where DH has a dominant position, the difficulties have increased due to global warming, competing technologies, and changing customer preferences. In this chapter, we present the results and theoretical implications of a 3-year long research project that explored the strategic decisions made by managers working in Swedish DH firms that have, to a large degree, met such challenges, in one of the world’s most deregulated energy markets, in a successful way. We also present two analytical concepts: the business model and business logic, as a means to understand the DH business and its possibilities for development. These concepts are contextualized in order to fit with aspects unique to district heating and cooling (DHC). Although helpful for understanding the core business, we suggest that a dominant industry-specific “business logic” should guide managers when they are making decisions on how to reshape their business models. Furthermore, several innate features of the DHC business accentuate the need for managers to act in a strategic manner and build long-term stable relationships with stakeholders, in order to be able to meet complex challenges through realizing complex business opportunities.