Renewable Energy Cooperatives
and The Decentralization of
Electricity Production
Thomas Bauwens
Centre for Social Economy (HEC-ULg)
Florence, 06/06/13
Outline
1. The phenomena of path-dependence and lockin: application to the electricity sector
2. The roles of consumers in the electricity
production
1.Path-dependence and lock-in
• Introduction of dynamics in the alignment/coherence
framework (Finger et al. 2010; Crettenand & Finger,
2013)
▫ Three configurations considered
 Public monopoly, including PPP
 Competition over existing networks
 Competition of networks
▫ Dynamics = shift from one configuration to another
• But the transition from one configuration to another
implies important costs, which arise from the inertia
of past technological and institutional choices
1.Path-dependence and lock-in
Path-dependence
• current technologies and
institutions depend on past
technological and institutional
choices
Lock-in
• technological systems and
institutions follow a specific
trajectory that is costly and
difficult to change, due to the
presence of increasing returns to
adoption.
• David and Arthur: technologies spread according to an autoenforcing process
• Existence of increasing returns to adoption
▫
▫
▫
▫
Economies of scale
Network externalities
Learning externalities
Adaptive excpectations
• Adaptation of this framework to social institutions (North, 1991)
1.Path-dependence and lock-in
• The electricity sector as a socio-technical
system
▫ system characterized by strong relationships
between technological, institutional, economic
and socio-political factors
 Socio-technical lock-in
▫ Combined interactions between those factors
that mutually reinforce themselves to create
inertia in the technological trajectories of our
economies
1.Path-dependence and lock-in
The socio-technical lockin in the electricity sector
• Historically characterized
by large centralized power
stations
• generally located close to
sources of fossil fuels and
remote from demand
• which supply huge grids
run by regional or
national monopolies
Distributed generation
model
• small generation units,
typically ranging from less
than a kW to tens of MW
• geographically dispersed
and located close to
consumer sites
• Higher involvement of
consumers
• Increasingly seen as a
more sustainable model of
power supply
1.Path-dependence and lock-in
Organizational
Industrial
Institutional
Technological
Societal
Sociotechnical
lock-in in the
electricity
sector
Behavioral
Path-dependence and lock-in
• In coherence with the alignment/coherence
framework
▫ “There are innovative technologies that allow the production of
electricity even at the level of private households… Also, ICT and
power electronics allow for opportunities of dedicated electricity
supply according to the needs and preferences of individual
customers. If this technical development breaks through, a new
technical paradigm will occur that would fundamentally change
the technological practice of this sector. This would allow for a
technical decomposition (i.e. fragmentation) of the electricity
system. Obviously, this technological practice would fit much
better to the institutional framework of a liberalised market”
(Künneke, 2008)
2.The roles of consumers
• Crettenand & Finger (2013): three main actors
▫ Institutional actors (political authorities, regulators, etc)
▫ Technological actors: have the possibility to innovate and develop technologies
▫ Market actors: provide the service of the given network industry
• And… consumers!
• The governance of infrastructures as common pool resources (Finger &
Künneke, 2008)
▫ Place for Third Sector organizations in the governance regime
• Concept of co-provision
▫ voluntary involvement of citizens in the provision and/or financing of publicly
provided goods and services
▫ Network industries: services are usually provided by private firms that act
within a framework of government regulation
2.The roles of consumers
• “A new role for consumers—as energy suppliers in their
own right—is one particular aspect of this potential step
change. A pre-condition for this change is the diffusion
of micro-generation technologies into the market which
will depend on consumers’ acceptance of microgeneration technologies. The need for acceptance will in
turn depend on the extent to which consumers are
actively involved in the micro-generation deployment”
(Sauter and Watson, 2007: 2771)
• This involvement depends in part on the institutional
arrangements of ownership and control of the
production units
 Role for renewable energy cooperatives
2.The roles of consumers
• By embedding technologies in social networks and fully involving
consumers in the energy production, cooperatives could make the
latter more willing to actively accept DG technologies
• Enhanced public awareness and commitment regarding energy
issues and energy technologies
• Empirical aspects of social acceptance
▫ Attitudes towards such technologies
▫ Electricity consumption behaviors
▫ Investments in such technologies
• Objective: empirical assessement of the enhancement of social
acceptance