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Smart grids and the transformation of the electricity sector: ICT firms as potential catalysts for sectoral change

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  • Erlinghagen, Sabine
  • Markard, Jochen

Abstract

The sustainability challenges associated with increasing demand and generation of electricity require a far-reaching transformation of the energy system. Smart grid technologies are expected to play a major role in such sectoral transformation. While a growing body of literature is concerned with the dynamics and particularities of sectoral transformation, most contributions have focused on exogenous shocks or new technological developments as drivers of change. This paper complements the existing perspectives by exploring the role of actors as catalysts for transformation. Within the field of smart grid, we study the transformative influence of ICT firms on the energy sector in Europe. More specifically, we analyze actor participation in 450 European smart grid projects between 2000 and 2011 as well as acquisitions in the field. We find that incumbent firms from the ICT sector have gained influence and drive transformation through the creation of variety, in terms of technology, business models and value chains. As a strategic reaction, electricity sector incumbents have recently acquired many start-ups specialized in ICT technology and thus expanded their competence base. We conclude that entrants from another sector can be important catalysts for sectoral transformation and should be analyzed more systematically in transition studies.

Suggested Citation

  • Erlinghagen, Sabine & Markard, Jochen, 2012. "Smart grids and the transformation of the electricity sector: ICT firms as potential catalysts for sectoral change," Energy Policy, Elsevier, vol. 51(C), pages 895-906.
    • Handle: RePEc:eee:enepol:v:51:y:2012:i:c:p:895-906
    DOI: 10.1016/j.enpol.2012.09.045
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