Darcy Parks, Linköping University
New entrants in the Swedish electricity market promise to resolve a longstanding tension that threatens the decarbonization of electricity systems. The tension is, to put it simply, that electricity suppliers lack clear economic incentives to help consumer reduce electricity consumption. While liberalized markets provide economic incentives to consumers, the revenues of electricity suppliers are correlated with the amount of electricity consumed by their customers. But in recent years, new entrants in the electricity market have experimented with an alternative model: they promise a win-win situation where they decouple their revenues from the electricity consumption of their customers, while providing digital tools to help customers reduce and shift their electricity consumption. These companies promise that a combination of alternative pricing schemes and digital tools—smartphone apps in particular—can enable the decarbonization of electricity systems.
The aim of this paper is to better understand how electricity markets are re-shaped by new entrants and digitalization. Theoretically, the paper draws on the sociology of expectations to analyze the promises that electricity suppliers make to their customers. These promises are conceptualized as assemblages of socio-technical components including smartphone apps and pricing schemes, as well as discourses of decarbonization and financial benefits. Methodologically, the paper compares a
cross-section of electricity companies in the Swedish market, including both new entrants and incumbents, all of which combine smartphone apps with time-of-use pricing. Empirically, the analysis is based on data collected from company websites and app-stores, collected during 2021 and 2022.
The analysis shows that there is a surprising variety in the promises made by electricity suppliers. While some new entrants focus strongly on digitalization and alternative pricing schemes, others place less emphasis on digitalization, and their promises focus instead on alternative pricing schemes and discourses of decarbonization. Furthermore, incumbents are increasingly providing their customers with digital tools to help reduce and shift electricity consumption. The paper shows that new entrants are not only capitalizing on the digitalization of electricity systems, but also rethinking the relationships between consumers and suppliers in electricity markets. However, there is an ongoing struggle between these new entrants and incumbents, who adopt similar discourses and technologies, while otherwise maintaining the tension between suppliers and customers that has long been the status quo of liberalized electricity markets.
