In Europe, taking on climate change involves backing a good number. 20% emissions cuts by 2020. 20% efficiency savings. 20% of whatever you’re having yourself and if all goes well by next year it will be 40% by 2050. 100% of these numbers are set by the European Commission through a process of policy making. EU officials, individual government representatives, the Commission, powerful industry interest groups such as Eurelectric and NGOs like Greenpeace all chip-in. As with most policy processes, power plays a significant role; some interests are more important than others. At the end of the process, years often, a number is chosen, a base-line comparison year and almost certainly a target. 20%. For 2020.
As such, a messy complex dynamic is abstracted to a target or equation and 28 states attempt to transpose it to local law, hoping this creates the sort of regulatory environment in which an electricity system will “transition” from a fossil based system to a grid powered by Europe’s wind and sunshine. Even if we succeed in this policy Yahtzee, even if we hit the 20%, 30%, 40%, what sort of new energy future has been created? How much stake for local firms or local government? How much democracy? 20%.
That’s the politics. Now the technology. And people.
Technological innovation and institutions
Technology is the turbines on hills and solar units on roofs, but also the infrastructure that connects these to the grid, the wires and cables of the grid itself, the knowledge that engineers and software developers use to manage the grid, the knowledge that end users acquire and share and modify. These are technological configurations that work. Add in people. People are important. Socio-technical configurations then. Configurations of networks, systems.
Over time new technologies emerge, not naturally, that’s where the evolutionary metaphor falls down. No, selection occurs through action by innovators and developers, markets slowly form, for wind, for solar, for renewably generated electricity. Technologies are legitimised by early adopters, maybe comfortable North European middle class, hipsters, Prince Charles, entrepreneurs, social norms change slowly. Politicians begin to support the new technologies, again slowly, but over time the bright green renewable force gains strength against the incumbent fossils.
Technological innovation systems theory has been used to describe the birth, growth and use of radical innovations across Europe. It puts the technology at the heart of the system, which includes also institutions and most importantly, networks of people, exposing the role of the financiers, urban and rural planners, lobbyists, civil servants and if we look hard enough, the public. Unfortunately somewhat unaccounted for within this theory — at least until recently — has been an explanation as to how local contexts affect the development of technology systems. Is our transition to a sustainable energy system, a singular? That is, should we expect the same sort of wind technologies, markets, ownership models and infrastructures in Ireland as we’ve seen develop in Spain or Denmark? If not, why not? What explains the landing of a technological innovation system to a new place, and what role does local (and indeed global) context play?
So how do we begin to account for this context? Over the past few years great work is being done on the role of context and space (relational as well as geographic) in the technological innovation system by people like Lars Coenen, Jochen Markard, Christian Binz, Bernard Truffer and Steffen Wirth — particularly useful is Binz’s excellent social network analysis on the geo-spatial characteristics of knowledge networks.
My interest is with institutions. The rules of the game. The signposts that guide the system, entrepreneurs, developers, and users and policy makers. Ireland offers us a useful location to study these phenomena. Quick techno-history lesson on the development of wind in Ireland. Despite zero local manufacturing the industry has done a pretty good job of getting turbines on hills. There are over 2,000MW of installed capacity on a small island network of less than 10,000MW with a peak demand of less than half of that. At times during 2013 wind produced over half the dispatchable power on the grid. These are the sort of numbers the International Energy Agency and European Union get excited about in annual reports. They look great in graph form, and with spiky lines rising rapidly from left to right. Despite a weak local energy department long captured by large state utilities an active and lively network of wind farm developers have emerged. So how has the Irish wind technology system developed and what sort of transition has come about. Who has paid and who has gained? So what is the role of institutional changes?
We know from (neo)institutional theory that change comes to institutions slowly. But sometimes, very occasionally, institutional equilibrium gets punctured. The 1970s oil shocks and nuclear meltdowns at Chernobyl and Fukushima are examples of events which, at least in some locations [the different institutional reaction to Fukushima in Germany and the UK is worth considering perhaps as a study of discourse if not institutions] led to institutional change. These institutional changes can be thought of as turbulence or tumult. Institutions are the rules or directions, interpreted by people as signposts, allowing for certain behaviours, frowning on others, guiding decisions, carrying risk. And in the tumult of big shocks, some of these signs end up pointing in the wrong direction.
The global recession of 2008 was a shock just about as big as they come. In Europe, Ireland was at the forefront of the shockwave and felt it harder than anywhere, except maybe Greece and Portugal. So what changed with the recession.
- The availability of finance: local banks that did not go bust stopped lending. Wind farm developers stayed afloat, but ancillary firms such as engineers and surveyors went under, particularly those exposed to the wider property market.
- Economic output dropped and with it grid demand causing a knock on effect on electricity markets.
- Non-renewables suffered too. Combined cyclic gas turbine generators built hurriedly at the peak of the boom weren’t spinning so often.
- Most most seriously and most institutionally relevant was the loss of economic sovereignty. The International Monetary Fund, European Central Bank and Commission dispatched their avant garde. This troika had real and perceived institutional impact in their host country. Setting up their field office in the Department of Finance they took control of national spending, borrowing, and to some extent the strategic value of state assets. The fire sale was on and brought with it institutional change that was regulative, normative and cognitive. In other words, in the aftermath of the recession there were dramatic changes to industry member laws, norms and behaviours.
Two interesting developments emerged from this tumult. First, industry consolidation. Ireland’s top two firms sold out to utilities, Airtricity to the UK’s SSE, and SWS to Bord Gáis, itself undergoing a fettering up exercise before a sale to British Gas/Centrica.
Second, a large discourse shift took place around the role of wind. Climate change and energy independence were backgrounded, selling wind to the UK was the new thing. And a newly elected UK Conservative Party, with its own take on renewables, particularly onshore wind, was only too happy to play along.
Hold on, wait a minute. It is more than conceivable that Airtricity and SWS, Ireland’s big two renewable start-ups, would have been sold to utilities regardless of the recession. Ireland’s discourse shift on selling wind to the UK may have taken place anyway. With increased interconnection a major Commission goal, sooner or later this was going to happen. This analysis does assert ultimate causation. But the point I will exert here is that institutions matter, structurally and contextually. They affect the how, how the industry develops, and what sort of technological paths are taken. And more to the point, who gets to drive the renewable industry along these paths. We see in Ireland’s case two large scale overseas utilities, two new wind start-ups with large scale export ambitions, and for the first time, large scale local opposition movements to wind.
Steffen Wirth and Jochen Markard make the point that “context structures” not only influence whether a novel technological field develops quickly or fails, they also shape the direction of development, the paths local developers and entrepreneurs may guide the technology in. Crucially, the impacts of institutional tumult is not evenly distributed. The same recession that made wind in Ireland a buyers market, privileged overseas buyers, in theory all players part of the same global innovation system.
Perhaps we are in danger then of a new form of technological colonialism, but more likely, this is something else, more akin to a technological absenteeism. Like the absentee landlords of the 18th and 19th centuries in Ireland. The original developers and entrepreneurs in Ireland are of the land, but as the industry consolidates and looks for overseas markets, the people are no longer with them.
The issues of institutional tumult in innovation systems and technological absenteeism is an issue beyond renewable energy. Big pharma, big data and privately owned “sharing economies” such as Uber offer an immediate opportunity to examine shifting institutional contexts. And when it comes to climate change mitigation strategies built on renewables deployment, we must go beyond the numbers and ask necessary questions: how, why and through whose agency do we build the future?
Mr Cian O’Donovan is a PhD researcher at SPRU. His thesis title is ‘The diffusion of large sustainable technology systems: The growth of the onshore wind sector in Ireland‘.
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This post was originally published on the Science Policy Research Unit website
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