While we usually buy heat for our homes and buildings from an energy company, there are companies who have excess heat that they do not know what to do with. Why do energy companies not buy the excess heat to a reduced price, and the company selling it can make a profit of what they have regarded a waste product? REES researchers have studied the possibility through the perspective of Integrated Product and Service Offerings (IPSOs) and Industrial Symbiosis. Read there findings here.
We all need heat to warm our homes and buildings, which we usually buy from an energy company. At the same time, there are others out there with excess heat they do not know what to do with. It seems there could be a smarter solution to this. Imagine if the energy company could buy the excess heat and pay a lower price than they would for primary energy, and if what has been a waste product in the other company could suddenly become a resource they get paid for.
So, there is someone with excess heat that they want to get rid of, and there is someone who wants to have that heat. Could bringing in a third party, an actor for the transmission of excess heat, help? Sofia Päivärinne and Mattias Lindahl at Linköping University studied the problem through the perspective of Integrated Product and Service Offerings (IPSOs) and Industrial Symbiosis. An IPSO means that you sell a physical product together with a value-adding service, and industrial symbiosis is a philosophy where you try to see industries as an ecosystem where the by-product of one can become the resource of another. Päivärinne and Lindahl called this third party an IPSO provider, and asked some actors already involved in collaborations around excess heat what they thought were the main opportunities and challenges with involving an IPSO provider.
On one side, we have those with excess heat. Most agree a neutral third party would be most beneficial for smaller businesses, where the IPSO provider can contribute with knowledge and resources the small business might not have. Since the energy companies buying the heat are usually larger companies, a third party can also create more balance in the relationship and make the small business more comfortable. No matter the size of the company with excess heat, there is a need to first identify the possible opportunities and then build trust between the organisations – another area where the IPSO provider could help. What they saw as negative was the fact that a share of the financial gain would go to the third party. However, if the collaboration would not have come to be without the IPSO provider, both the other parties still benefit from it.
On the other side, we have those with a demand for heat. They thought a third party was unnecessary for them, but maybe useful for small companies with excess heat. However, they also saw that it could help in the start-up process by finding the sources of excess heat and securing the interests of both parties in negotiations. Just as for those with an excess of heat, they saw the fact that the IPSO provider would take a share of the profits as a negative aspect, but it would still be acceptable if the collaboration makes all parties gain more than they would have without it.
It appears the opportunities outweigh the challenges. Of course, every collaboration of this type is unique and requires unique solutions. It is important that all parties see that they have something to gain, and that they think this collaboration will bring them closer to their goals. Where one side is wasting heat that the other side wants to use, it seems obvious that there must be a smarter solution. Adding an IPSO provider might be just the ingredient needed to make a successful collaboration and smart use of heat happen.
Source: Päivärinne, S. and Lindahl, M. (2016). “Combining Integrated Product and Service Offerings with Industrial Symbiosis – a study of opportunities and challenges”, Journal of Cleaner Production 127: 240‐248.