Emerging Business Models for Local Distribution Companies in Ontario

Local Distribution Companies (LDCs) have the potential to be leaders in coordinating and stewarding a Sustainable Energy Transition (SET) in Ontario. However, under the current LCD business model structure, LDCs are unable to capture the benefits from sustainable energy and advance a sustainable energy transition. Separately from LDC operations, sustainable energy is disrupting the electricity system through the proliferation of Distributed Energy Resources, Information and Communication Technology occurring Behind the Meter (BTM). The adoption of BTM applications erodes LDC profitability and threatens their existence. The pushing force from an outdated LDC business model compounded with the pulling force from disruptive sustainable technology has created an opportunity for LDCs to innovate their business model in order to adapt to the changing energy paradigm of the 21st century. This paper explores and evaluates seven emerging LDC business models used in Ontario and provides a recommendation of a possible pathway for a viable LDC business model that can leverage sustainable energy while maintaining the electrical grid infrastructure.