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Article
Publication date: 28 October 2014

Uwe Kehrel and Nathalie Sick

This paper aims to extend the small body of literature on energy industry transitions on firm level. A growing number of articles shed light on paradigm shifts in the…

Abstract

Purpose

This paper aims to extend the small body of literature on energy industry transitions on firm level. A growing number of articles shed light on paradigm shifts in the energy industry and the influence of renewable energies on industry structures. In the majority of cases, the authors analyze changes on a global or national level.

Design/methodology/approach

Energy companies’ forecasting capabilities are particularly important to enable them to react in time to upcoming changes in industry structures. In this context, we analyze annual reports of German energy companies to evaluate their economic and technological forecasting competencies.

Findings

Big energy providers offer high economic forecasting quality, but seem to be less able to derive valid forecasts in terms of renewable energies from the currently unstable political frameworks. On the contrary, renewable energy companies do not seem to suffer from these difficulties and provide good foresting accuracy in terms of renewable energy development, but show less accurate economic forecasting quality.

Practical implications

Big energy providers need to find the means of responding to the challenges and integrate changing political guidelines and support into their forecasting system. Renewable energy companies, in contrast, should focus on company-level profitability and the respective economic forecasting competencies.

Originality/value

This paper makes a significant contribution to the literature on the subject of energy industry transitions by providing insights from publicly available data on firm level. The findings are highly relevant for managers of the energy industry and policy makers in this field.

Details

International Journal of Energy Sector Management, vol. 8 no. 4
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 6 April 2012

Corinna Dögl, Dirk Holtbrügge and Tassilo Schuster

The purpose of this paper is to analyze the competitive advantage of German renewable energy firms in India and China. Porter's diamond model is modified and specified for…

Abstract

Purpose

The purpose of this paper is to analyze the competitive advantage of German renewable energy firms in India and China. Porter's diamond model is modified and specified for the renewable energy industry.

Design/methodology/approach

Based on Porter's diamond model of competitiveness, the authors examine the demand for renewable energies in India and China and the ability of German firms to meet this demand.

Findings

While the overall demand for renewable energies in India and China is significant, the study reveals remarkable differences in the fields of biomass, solar and wind energy. The findings are meant to address managers in the renewable energy industry and to aid policy makers in environmental support and action.

Research limitations/implications

A major theoretical contribution of the study is the application of Porter's diamond model to the renewable energy industry, as well as the identification and operationalization of the relevant causal and proxy variables.

Practical implications

The paper provides a detailed analysis of the factors on which the competitive advantage of German renewable energy technologies in India and China is based. This helps managers of renewable energy firms to focus on those areas where they have particular strengths and to introduce measures to overcome potential weaknesses.

Originality/value

The authors used a modified version of Porter's diamond model and specified it for the renewable energy industry. The model was tested empirically in Germany and both emerging countries on the basis of secondary data.

Details

International Journal of Emerging Markets, vol. 7 no. 2
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 27 May 2014

Dirk Schiereck and Julian Trillig

The purpose of this paper is to determine the impact of political risk on the German solar energy industry. The authors analyze the period from 2006 to mid-2011, when the…

Abstract

Purpose

The purpose of this paper is to determine the impact of political risk on the German solar energy industry. The authors analyze the period from 2006 to mid-2011, when the technological development of this sector was remarkable while the whole industry is depending on political support and subsidies.

Design/methodology/approach

The authors apply an EGARCH model assessing potential changes in conditional volatility response of solar industry stock returns following political risk events.

Findings

The results document major changes in political support of the solar industry drive capital market risk. Whereby favorable political news significantly decrease volatility response and unfavorable political news do not affect volatility response. Moreover, the authors find that the volatility response varies with the exposure to political risk. Companies with higher exposure to political risk show more significant volatility response.

Practical implications

Political risk affects the cost of capital of companies in this sector. Thus, managers are able to time equity measures in a way that they can determine periods when the investor's required return is low due to a reduced risk premium. The authors suggest risk reducing public policy facilitates investments in those industries and thus fosters the development and diffusion of immature technologies.

Originality/value

The paper helps policy makers, managers, and investors to assess the impact of political risk on the overall risk of the German solar energy sector and in a broader view of immature or high-tech industries that depend crucially on governmental support.

Details

International Journal of Energy Sector Management, vol. 8 no. 2
Type: Research Article
ISSN: 1750-6220

Keywords

Content available
Article
Publication date: 17 July 2018

Killian McCarthy

In Paris, in 2015, 195 countries agreed to limit the emission of CO2. The German Energiewende is an example of the types of regulatory changes that countries will need to…

Abstract

Purpose

In Paris, in 2015, 195 countries agreed to limit the emission of CO2. The German Energiewende is an example of the types of regulatory changes that countries will need to enact to meet their Paris commitments. The Energiewende saw the German Government forcefully shift the energy base from non-renewable to renewable sources to reduce CO2 emissions, and the effect of this was to reduce the market value of some German energy firms by as much as 70%. This paper aims to consider the strategic options available to energy incumbents facing the sort of regulatory challenges implied by the Paris agreement.

Design/methodology/approach

This paper is a literature review and a thought experiment, in which, 12 fields of strategy research are reviewed, and using the insights obtained from these fields, four strategic options are proposed for the energy incumbents, namely, “fight,” “flight,” “fit” and “follow.” Each strategy is introduced and evaluated, and, by looking at examples from other industries, the viability of that strategy for the energy industry is concluded.

Findings

Of the four strategies identified – that is, fight (lobbying), flight (internationalization or diversification), follow (imitation) or fit (adopt a core competencies perspective that re-imagines the firm) it was concluded that only the last is feasible. The present review, and the application of the discussion to the energy industry, suggests that “fight” is viable only in the short term as a delaying strategy; “flight” is a value-destroying strategy, and, therefore not a real option for the energy industry; “follow” will lead the energy incumbents to lose their current positions of power; and only “fit” will allow the energy incumbents to remain viable in the long term.

Research limitations/implications

All research has its limitations. The main limitation of this research is the fact that this study is a thought experiment based on a literature review. The suggested strategies are forward-looking, but are based on historical examples, and are intended to guide the energy incumbents, even when they are based on non-energy examples. The reader should view this paper in that light.

Practical implications

The practical implication of this research is that, of the 12 fields of strategy that it reviews, there is only one feasible strategy for the energy incumbents looking to survive the sorts of regulatory challenges implied by the Energiewende and the Paris agreement. The research suggests that many/most/all of the energy incumbents will, at first, choose a “fight” strategy, but in the long term only those that choose for a “fit” strategy will survive the sort of disruptions implied by these regulatory changes.

Social implications

The social implications of this research are that many/most/all firms in the affected industry will go through a predictable process, of first resisting the change, before eventually supporting it; that “flight” is not a viable strategy; and that radical innovation rarely comes from incumbents. Policymakers should be aware of these facts when not only working with incumbents to develop the regulations necessary to meet the Paris climate commitments but also looking at the impacts of regulation and when trying to “pick winners.”

Originality/value

The paper reviews the existing literature, and the review is not new. The application to a specific industry and the advice gleaned from this for managers and policymakers is new and of high value.

Details

Journal of Business Strategy, vol. 39 no. 4
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 28 October 2014

Inga Schlichting

The purpose of this paper is to use expert interviews with communication managers of the German energy industry to analyze the strategic aims and challenges of consumer…

Abstract

Purpose

The purpose of this paper is to use expert interviews with communication managers of the German energy industry to analyze the strategic aims and challenges of consumer campaigns as a relatively new phenomenon in German public affairs management. The analysis is based on structuration theory, which is used as a theoretical framework. This framework helps to conceptualize the different logics of action within non-public and public paths of public affairs management, their stakeholders and respective instruments.

Design/methodology/approach

Expert interviews with German public affairs managers from multinational and regional energy corporations as well as industry associations were conducted regarding their communication in the context of climate regulation. Based on this data, the study reconstructs manager’s strategic considerations about why to engage in consumer campaigns, and analyses the challenges they see with them, and the strategies they employ to handle these.

Findings

Managers perceive the importance of the public path of regulative intervention as growing along with a strong media orientation of political authorities. Against this backdrop they describe the bypassing of critical journalists and the engaging of critical individuals and minorities as the strategic aims of consumer campaigns. They portray a lack of credibility as the main challenge of such campaigns – and relativising the corporation’s societal efforts as well as allowing public critique as most promising strategies to handle this challenge.

Originality/value

The contribution of the study is twofold: first, it adds to the scientific analysis of consumer campaigns as a rather new phenomenon in German public affairs management. Second, practitioners may utilize the results as impulses for their own communicative strategies in the context of public affairs management.

Details

Journal of Communication Management, vol. 18 no. 4
Type: Research Article
ISSN: 1363-254X

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Article
Publication date: 11 October 2011

Xuanwei Cao and Christoph Zabe‐Brechtel

The purpose of this paper is to elucidate the dynamic interactions and co‐evolution of institutions with the technology and organization fields in emerging industry

Abstract

Purpose

The purpose of this paper is to elucidate the dynamic interactions and co‐evolution of institutions with the technology and organization fields in emerging industry development. Insights and inspirations from comparison of the triangle relationship among government, market and local community in different institutional contexts could contribute to possible institutional innovation in the context of large‐scale institutional transition. In this way, this paper is expected to offer insights to the development of emerging industries in China.

Design/methodology/approach

The paper reviews the focal literature focusing on institutional change and the co‐evolution of institution, industry and technology. A multi‐level conceptual framework is put forward to explain the mechanism for the co‐evolution of technology, organization and institution. A multi‐case comparison method was applied to compare and disclose the process of co‐evolution of institutions, and the technology and organizational fields, as well as varied paths of industry development in different institutional contexts.

Findings

Emerging industry development in China is still presenting the character of path dependence to a great extent under traditional institutional arrangement, while the power and possible contribution from broader actors in the local community have been ignored. Driving force for a more innovative institutional transition towards emerging industry development should consider decentralized institutional arrangement and actions at local community instead of “command and control” from central planning.

Practical implications

First, the comparison of wind energy industry development in three countries creates possibilities for further analysis and reference for China's emerging industry. Second, the illustration of the triangle relationship among government, market and local community in different countries helps policy makers in China reconsider and redesign an effective institutional framework for balancing the powers among indigenous community, local government and market. Institutional alignment should be listed as an important consideration during the process of the policy design of such an effective institutional framework.

Originality/value

The paper presents a model to understand the dynamic co‐evolution of the institution, technology and organizational fields. It confirms the role of institution in promoting emerging industry development. Particularly, it offers inspirations for the development of emerging industries in nations facing large‐scale institutional transition.

Details

Journal of Science and Technology Policy in China, vol. 2 no. 3
Type: Research Article
ISSN: 1758-552X

Keywords

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Article
Publication date: 5 June 2017

Michael Kolloch and Fabian Reck

This paper aims to focus on how different types of knowledge are exchanged within innovation networks in the German energy industry. External factors such as market…

Abstract

Purpose

This paper aims to focus on how different types of knowledge are exchanged within innovation networks in the German energy industry. External factors such as market pressure through liberalization, de-carbonization and decentralization challenge established actors in the industry. Answers to these challenges cannot be found by single actors but require networks to gather and concentrate innovation activities. This implies a need for knowledge transfer among energy providers. The authors aim at exploring knowledge exchange relations in-depth by treating them as multidimensional flows which can comprise technological, market, managerial or regulatory knowledge. In detail, the authors examine patterns of knowledge exchange on network-, dyad- and firm-level. Furthermore, first, empiric results are provided on how two of these patterns, namely, a firm’s propensity to form multiplex instead of uniplex ties as well as the composition of externally acquired knowledge concerning the four types, influence organizational innovativeness.

Design/methodology/approach

The authors address their research questions by conducting an in-depth investigation of the largest network of municipal utilities in Germany. The analysis is based on quantitative data collected via standardized online questionnaires drawing on socio-metric methods to reconstruct knowledge exchange networks as well as traditional approaches from socio-empiric research to evaluate firm innovativeness.

Findings

The findings indicate that while technological, market, managerial and regulatory knowledge represent different types of knowledge with different exchange patterns, these transfers are interdependent. In particular, the analysis reveals non-hierarchical relations of complementarity. The authors furthermore provide evidence for the existence of ideal profiles for attaining different types of innovation. One central tendency across all of these profiles is that outperformers acquire regulatory knowledge to a significantly lesser degree than other firms and focus more on the other types instead.

Research limitations/implications

This paper solely focusses on the largest network of municipal utilities whereby it is questionable how representative it is for the whole industry. Additionally, due to the cross-sectional design, the paper cannot fully rule out issues of endogeneity in the quantitative analysis.

Practical implications

This paper delivers valuable insights for managers in the energy sector who seek to either enter and manage inter-organizational networks or apply external knowledge to foster innovation. In particular, the authors reveal benchmark profiles for external knowledge acquisition which may serve as templates for strategic collaboration and innovation management.

Originality/value

To the authors’ knowledge, this paper presents the first innovation-related network analysis in the energy industry. Rather than operationalizing knowledge transfer as a simplex flow relation, the authors examine different types of knowledge, their patterns of exchange and their distinct effects on process, product and administrative innovations.

Details

International Journal of Energy Sector Management, vol. 11 no. 2
Type: Research Article
ISSN: 1750-6220

Keywords

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Book part
Publication date: 22 December 2016

Elena Cedrola and Loretta Battaglia

The chapter aims to examine the number, type, and international presence of European companies (Italian, Spanish, French, German, Dutch, Rumanian, Bulgarian, and English…

Abstract

Purpose

The chapter aims to examine the number, type, and international presence of European companies (Italian, Spanish, French, German, Dutch, Rumanian, Bulgarian, and English) operating in the renewable energy industries, as well as Chinese companies. Through the analysis of two businesses that have established partnerships and a wholly foreign owned enterprise (WFOE) in China, the chapter identifies the main elements of their management strategies that led to successful operation in China.

Methodology/approach

To analyze the main characteristics and the internationalization of the European firms operating in the renewable energy industry, we collected information from secondary data. To identify the successful business models to operate successfully in China, we adopted a qualitative case study approach, based on direct interviews and information published on the company websites and articles found on the web.

Findings

European enterprises encounter difficulties in approaching the Chinese market, which is rapidly developing as a result of the latest five-year plan setting energy and climate change targets and policies. Indeed, the number of European firms investing in China is low. Through the analysis of two business cases (Asja and Caleffi) that have established partnerships and a WFOE in China, the chapter identifies the main elements of their management strategies that led to successful operation in China.

Research limitations

The relatively small number of cases (two) limits the generalizability of our findings. However, we are convinced that the size of our case companies and their experience in China mean our results are well grounded, although more research is needed.

Originality/value

To the best of our knowledge, this is the first study that has explored the business models adopted by European firms operating in the renewable energy industry in China.

Details

China and Europe’s Partnership for a More Sustainable World
Type: Book
ISBN: 978-1-78635-331-3

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Article
Publication date: 18 September 2017

Dominik Dellermann, Alexander Fliaster and Michael Kolloch

Past research demonstrated that novel IT-based business models generate tremendous returns for innovators. However, the risks associated with these innovations remain…

Abstract

Purpose

Past research demonstrated that novel IT-based business models generate tremendous returns for innovators. However, the risks associated with these innovations remain under-explored. This paper aims to address this critical gap analyzing risks and offering important insights particularly for practitioners.

Design/methodology/approach

The authors adopted an exploratory multiple-case study research design. It draws on 22 semi-structured interviews with managers from leading energy utilities, as well as leading providers of virtual power plants technology within the German energy industry.

Findings

The research reveals that main risks in new digital business models in the energy sector are associated with three forms of interdependence between innovation actors: the regulatory, the technological and the collaborative. To deal with these interdependencies, the authors propose an original multi-step risk management framework. This framework considers the outreach as a critical dimension for risk assessment and offers a new risk response matrix to draw individual and collective mitigation activities for specific types of risks.

Practical implications

This paper offers a framework for the management of interdependence risks that are fundamental for business model innovations based on IT. Thus, it is applicable in companies both inside the energy sector and beyond.

Originality/value

This paper analyzes an important digital business model innovation that has not yet been explored in management literature – the virtual power plant (VPP). It is based on original and current empirical work and proposes a novel risk management framework for business organizations.

Details

Journal of Business Strategy, vol. 38 no. 5
Type: Research Article
ISSN: 0275-6668

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Abstract

Details

Marketing Intelligence & Planning, vol. 20 no. 7
Type: Research Article
ISSN: 0263-4503

Keywords

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