Skip to main content
Log in

Adoption of smart grid technologies by electric utilities: factors influencing organizational innovation in a regulated environment

  • Special Theme
  • Published:
Electronic Markets Aims and scope Submit manuscript

An Erratum to this article was published on 31 October 2014

Abstract

Incorporation of information and communications technologies has the potential to reduce the environmental impacts of electricity generation and distribution while improving the quality, reliability and efficiency of electricity supply. However, integrating smart grid technologies presents major organizational challenges to utilities, and adoption rates are still low. New knowledge is needed on organizational innovation in response to this potentially disruptive technology in the context of a regulated monopoly. This study examines factors influencing the adoption of smart grid technologies using data from 15 interviews with 12 U.S. utilities. The study provides useful insights and implications for utilities and regulators.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1

Similar content being viewed by others

Notes

  1. Also, ETS is somewhat “smarter” to begin with, as many centralized transmission systems already incorporate monitoring and control systems such as SCADA.

References

  • Blaabjerg, F., & Guerrero, J. M. (2011). Smart grid and renewable energy systems. Electrical Machines and Systems (ICEMS), 2011 International Conference on IEEE, Beijing, China.

  • Chau, P. Y., & Tam, K. Y. (1997). Factors affecting the adoption of open systems: an exploratory study. MIS Quarterly 21(1), 1–24.

  • Cooper, R. B., & Zmud, R. W. (1990). Information technology implementation research: a technological diffusion approach. Management Science, 36(2), 123–139.

    Article  Google Scholar 

  • Damanpour, F. (1991). Organizational innovation: a meta-analysis of effects of determinants and moderators. Academy of Management Journal, 34(3), 555–590.

    Article  Google Scholar 

  • DiSavino, S., Trotta, D., & Podkul, C. (2012). New York’s Governor Cuomo blasts utilities for Sandy Outages. Reuters. Retrieved from http://www.reuters.com/article/2012/11/09/us-storm-sandy-utilities-cuomo-idUSBRE8A807J20121109.

  • Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91.

    Google Scholar 

  • Dubé, L., & Paré, G. (2003). Rigor in information systems positivist case research: current practices, trends and recommendations. MIS Quarterly, 27(4), 597–635.

    Google Scholar 

  • Edison Electric Institute (2011). Key facts about the electric power industry. Retrieved from http://www.eei.org/resourcesandmedia/industrydataanalysis/Pages/default.aspx. Accessed 2 Feb 2013.

  • Energy Information Administration (2000). The Changing Structure of the Electric Power Iindustry 2000: An Update. Retrieved from http://www.eia.gov/electricity/.

  • Energy Information Administration (2012). Assumptions to the Annual Energy Outlook 2012. Retrieved from http://www.eia.gov/forecasts/aeo/assumptions/pdf/0554(2012).pdf.

  • Farhangi, H. (2010). The path of the smart grid. Power and Energy Magazine, IEEE, 8(1), 18–28.

    Article  Google Scholar 

  • Feisst, C., Schlesinger, D., & Frye, W. (2008). Smart grid: the role of electricity infrastructure in reducing greenhouse gas emissions. Cisco Internet Business Solutions Group. Retrieved from http://www.cisco.com/web/about/ac79/docs/Smart_Grid_FINAL.pdf.

  • Fichman, R. G. (1992). Information Technology Diffusion: A Review of Empirical Research. Proceedings of the Thirteenth International Conference on Information Systems (ICIS), Dallas, USA, 195–206.

  • Fichman, R. G. (2000). The diffusion and assimilation of information technology innovations. In R. Zmud (Ed.), Framing the domains of IT management: projecting the future through the past (pp. 105–128). Cincinnati: Pinnaflex Educational Resources, Inc.

    Google Scholar 

  • Greentech Media (2012). Top Ten Utility Smart Grid Deployment in North America. Retrieved from http://www.greentechmedia.com/articles/read/top-ten-utility-deployments-in-north-america.

  • Helper, S. (1995). Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry. National Bureau of Economic Research Working Paper 5278.

  • Jeyaraj, A., Rottman, J., & Lacity, M. (2006). A review of the predictors, linkages, and biases in IT innovation adoption research. Journal of Information Technology, 21(1), 1–23.

    Article  Google Scholar 

  • Joskow, P. L. (2010). Dumb Grids, Smart Grids, Our Grids. Retrieved from http://economics.mit.edu/files/5395.

  • Kassakian, J. G., & Schmalensee, R. (2011). The Future of the Electric Grid: An Interdisciplinary MIT study. Massachusetts Institute of Technology Technical Report.

  • Kossahl, J., Kranz, J., & Kolbe, L. (2012). A Perception-based Model for Smart Grid Adoption of Distribution System Operators - An Empirical Analysis. Proceedings of the 18th American Conference on Information Systems (AMCIS), Seattle, USA.

  • Kranz, J., & Picot, A. (2011). Toward an End-to-End Smart Grid: Overcoming Bottlenecks to Facilitate Competition and Innovation in Smart Grids. National Regulatory Research Institute.

  • Krippendorff, K. (2004). Content analysis: An introduction to its methodology (2nd ed.). Thousand Oaks: Sage.

    Google Scholar 

  • Kuan, K. K., & Chau, P. Y. (2001). A perception-based model for EDI adoption in small businesses using a technology–organization–environment framework. Information & Management, 38(8), 507–521.

    Article  Google Scholar 

  • Leeds, D. (2009). The Smart Grid in 2010. Market Segments, Applications, and Industry Players, GTM Research.

  • Minkel, J. R. (2008). The 2003 Northeast blackout—five years later. Scientific American. Retrieved from http://www.scientificamerican.com/article.cfm?id=2003-blackout-five-years-later.

  • Morgan, G. M., Apt, J., Lave, L. B., Ilic, M. D., Sirbu, M., & Peha, J. M. (2009). The Many Meanings of “Smart Grid”. Carnegie Mellon Electricity Industry Center. Retrieved from http://wpweb2.tepper.cmu.edu/ceic/pdfs_other/Smart_Grid_July_09.pdf.

  • Picot, A., & Kaulmann, T. (1989). Comparative performance of government-owned and privately-owned industrial corporations. Journal of Institutional and Theoretical Economics, 145, 298–316.

  • Popping, R. (2010). Some views on agreement to be used in content analysis. Quality and Quantity, 44, 1067–1078.

    Article  Google Scholar 

  • Robey, D., Im, G., & Wareham, J. D. (2008). Theoretical foundations of empirical research on interorganizational systems: assessing past contributions and guiding future directions. Journal of the Association for Information Systems, 9(9), 4.

    Google Scholar 

  • Rogers, E. M. (2003). Diffusion of Innovations (5th ed.). New York: Free Press.

    Google Scholar 

  • Rose, N. L., & Joskow, P. L. (1990). The diffusion of new technologies: evidence from the electric utility industry. RAND Journal of Economics, 21(3), 354–373.

    Article  Google Scholar 

  • Rycroft, R. W., & Kash, D. E. (2002). Path dependence in the innovation of complex technologies. Technology Analysis & Strategic Management, 14(1), 21–35.

    Article  Google Scholar 

  • Sanyal, P., & Bulan, L. T. (2007). Regulatory risk, market risk and capital structure: evidence from US electric utilities. Brandeis University Working Paper.

  • SGMM Team, (2010). Smart Grid Maturity Model: Model Definition (CMU/SEI-2010-TR-009). Software University. Retrieved from http://www.sei.cmu.edu/library/abstracts/reports/10tr009.cfm. Accessed 1 Sept 2013.

  • Thong, J. Y. (1999). An integrated model of information systems adoption in small businesses. Journal of Management Information Systems, 15(4), 187–214.

    Google Scholar 

  • Tornatzky, L. G., & Fleischer, M. (1990). The processes of technological innovation. Lexington: Lexington Books.

    Google Scholar 

  • U.S. Department of Energy (2008). The Smart Grid: An Introduction. Retrieved from http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/DOE_SG_Book_Single_Pages%281%29.pdf.

  • U.S. Department of Energy (2012) Smart grid investment grant program: progress report Retrieved from "http://energy.gov/sites/prod/files/Smart%20Grid%20Investment%20Grant%20Program%20-%20Progress%20Report%20July%202012.pdf".

  • Yin, R. K. (1994). Case study research: Design and methods (2nd ed.). Newbury Park: Sage Publications.

    Google Scholar 

  • Zhu, K., Kraemer, K. L., Xu, S., & Dedrick, J. (2004). Information technology payoff in e-business environments: an international perspective on value creation of e-business in the financial services industry. Journal of Management Information Systems, 21(1), 17–54.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Jason Dedrick.

Additional information

Responsible Editor: Johann Kranz

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dedrick, J., Venkatesh, M., Stanton, J.M. et al. Adoption of smart grid technologies by electric utilities: factors influencing organizational innovation in a regulated environment. Electron Markets 25, 17–29 (2015). https://doi.org/10.1007/s12525-014-0166-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12525-014-0166-6

Keywords

JEL classification

Navigation