Strategy as changing the rules of the game for the emerging smart grid

EUROPEAN suppliers of electricity face a fundamental and unstoppable threat. The emergence of renewable, distributed electricity sources has reduced the market price of electricity. The price has fallen so low, in fact, that it may be impossible to operate existing generating plants in an economic manner. The erosion in the industry is deepest in those countries where renewable energy has been stimulated and diffused most broadly, such as Germany. Strategic decisions by major stakeholders in the power system about how to proceed from here can be seen as elements in a multi-actor game. And this indeed is a game of strategy.