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Abstract

Conventional energy providers are currently experiencing fundamental uncertainty about the evolution of the energy system over the coming few decades within the context of the Paris Agreement on Climate Change (2015), and the implications of these changes for their own profitability and long-term survival. How do these companies take wide-ranging investment decisions and convince investors that they will be able to generate a sustained return on investment in a rapidly changing business world? This paper suggests a conceptual framework for understanding the complexity of this strategic management task and the ways in which companies manoeuver their way through these challenging times. The case of large German energy providers is used to demonstrate the insightfulness of this approach. We show how electricity-producing companies deal with current fundamental uncertainties by creating imaginary futures that allow for disruptive change. We identify stories generated within these companies, and analyse the ways in which these stories are entangled with the materiality of energy production. The main theme is the possibility of transition from an old, fossil fuel-based energy world to a new, decarbonized energy world. This paper will also show how companies develop and attempt to implement their specific decarbonization strategies, highlighting in particular the role of the Paris Agreement. © 2019 Elsevier Ltd