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The Influence of Innovations on International Electric Power Business in the 21st Century

The Influence of Innovations on International Electric Power Business in the 21st Century

Journal of Economic Regulation, , Vol. 10 (no. 4),

The article considers the influence of innovative technologies on prospects of international electric power business. The study is based on comparison of macroeconomic indicators and data of the largest electric power companies, which made it possible to determine the main directions of mutual influence of business and the world economy. Currently the world economy is at the beginning of the recovery phase of the Kondratiev big cycle, which coincides with the beginning of a new technological formation. The growth in use of new technologies for the production and transmission of electricity is the evidence of their effectiveness. At the same time the possibility of introducing fundamentally new, disruptive technologies into the existing architecture of the world electric power industry can cause paradigm shifts, radically changing principles of operation in centralized power supply. International electric power business is in difficult conditions of turbulence of the world economy and uncertainty of the development strategy of electric power industry. The largest electric power companies independently develop R&D, trying to obtain a competitive potential in the world market. Another way to maintain a stable position for companies is to optimize the portfolio of assets, primarily through mergers and acquisitions. Acquisition of assets, both in the electricity business and in related industries, can help company to achieve a synergistic effect, and sale of part of assets – get rid of non-core business or focus on a certain type of activity. To optimize their portfolios, companies also conducted business restructuring, most often this is due to allocation of innovative direction in a separate activity. Thus, a close relationship between the policy of companies in the electricity business in the field of R&D and the future development of world energy is seen. At the same time, electricity companies occupy a wait-and-see position, optimizing the management structure and composition of assets, which makes it possible to participate in the development of new technologies and their implementation.

Keywords: electric power industry; electric power companies; renewables; mergers and acquisitions; innovations

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