Multi regime interactions between UK infrastructure sectors

Research Fellow, Dr. Ralitsa Hiteva, focuses in this blogpost on the importance of learning more about the interactions between several sectors at the heart of governing infrastructure independencies, and argues for better co-ordination between them.

This year’s International Conference on Sustainability Transitions (IST) in Utrecht is dedicated to impact and institutions. I, Dr Ralitsa Hiteva, am here to present a paper titled ‘Multi regime interactions between UK infrastructure sectors’.

The research informing the presentation is part of the ITRC 5-year project which examines the governance of infrastructure interdependencies between 5 sectors in the UK: water, energy, ICT, waste and transport. The presentation outlines the governance interactions between the water and electricity sectors, and between the electricity, ICT and private vehicles sectors in the UK through 3 periods of time: before privatisation (until 1980s), during privatisation (between 1980s – 2000) and post privatisation (between 2000 – 2014). The research underpinning this presentation draws on peer reviewed academic literature, government and industry reports, and semi-structured interviews with infrastructure providers and regulators in the UK.

The water, electricity, ICT and private vehicles sectors are treated as ‘socio-technical regimes’, which encompass the network of actors and social groups; the formal, cognitive, and normative rules that guide the activity of actors; as well as the material and technical artefacts and infrastructures (Geels, 2006). Because of the increased interdependencies between infrastructure sectors, changes within one infrastructure regime (or sector) have the power to affect other, related regimes (Raven and Verbong, 2007; Konrad et al, 2008). The governance interactions between the 4 sectors are analysed using Raven and Verbong’s (2007) typology of interactions between regimes, which include: competition, symbiosis,integration and spill-over .

Although the water, electricity, ICT and private vehicles regimes have significant differences (for example radically different regulatory arrangements) they are increasingly characterised by more intense complementarity, driven by environmental, economic and technological pressures, and “bounded” by concepts like smart grid, smart cities and low carbon vehicles (Raven, 2007).

In the case of the water and electricity sectors, interactions before privatisation were linked through a symbiotic customer-supplier relationship (with a substantial amount of electricity supplied to the water industry, while water was used in the electricity industry primarily for cooling at large power stations).

The number of institutional and actor level interactions increased during the 1980s and 1990s when both sectors were privatised. The symbiotic interaction between the water and electricity continued to strengthen due to the European Union’s agenda of improving water and wastewater quality. However, a spill-over of regulatory rules between regimes also occurred, including a common approach to the regulation of monopoly networks, joint environmental regulation by the Environment Agency and some temporary horizontal integration as a result of corporate mergers and takeovers.  Although more complex, these interactions between the two regimes were uncoordinated and short lived, and were underpinned by separate objectives and decision-making arrangements. The latter ultimately rendered the horizontal integration of water and electricity companies financially unviable following a regulatory changes by the water regulator Ofwat.

Since 2000, water companies began to invest in on-site renewable energy facilities, prompting some modest integration between the two sectors. The extent of renewable energy investment by water companies was not significant enough for them to become competitors with the energy utilities. However, the establishment of common policy goals for both the water and electricity regimes (especially for carbon emissions reduction) have encouraged policy dialogue and information sharing.

Although the water industry began purchasing renewable energy from accredited energy suppliers to offset their greenhouse emissions, a policy change in 2010 stopped the use of renewable energy via ‘green tariffs’ for offsetting emissions. While the introduction of the Carbon Reduction Commitment policy restricted the use of renewable generation to meet company targets, placing significant barriers to the integration of the two sectors via renewable energy investment.

In the case of the electricity, ICT and private vehicles sectors, interactions before privatisation were also linked through a symbiotic customer-supplier relationship (with electricity supplied to the private vehicles and ICT sectors, and ICT used in the electricity industry).

Since the 1990s, ICT has become increasingly integrated with practically all infrastructure activities, changing the way in which assets are operated, infrastructure services are delivered and demanded. This has led to increasingly symbiotic and complex interactions with the private vehicles and electricity sectors. It can be argued that the ICT and electricity sectors have become mutually dependent.

In the third period the ICT sector began to form the basis for a transformation in the energy system, as it became integrated through the supply chain all the way to the final consumer. This includes its use in embedding distributed renewable energy generation sources into the grid and balancing international energy flows in transmission from reserved power sources.

Advances in ICT led to spill-over to the electricity sector (through the low-carbon network innovation projects funded through the Low Carbon Network Fund) and partial integration with the private vehicles sectors particularly in terms of charging electric vehicles. However, although (SMEs) ICT are the key innovators, it is distribution network operators (from the electricity sector) who receive the lion share of funding. Although ICT companies are becoming active players in the electricity market, they are still underrepresented in existing governance networks and with the overall number and type of interactions between the different sectors rapidly increasing, there is an acute need for a more integrated type of governance of infrastructure interdependencies in the UK.

Similar comparisons between several (more than 2) sectors are few and far between but the potential to learn more about the institutions and impact (the two themes of this year’s IST conference) at the heart of governing infrastructure interdependencies is immense. A starting point is that multi-regime dynamics can create both barriers and opportunities for sustainability transitions. Better coordination between infrastructure sectors can prevent situation where changes in policy priorities for one sector can lead to competing or conflicting demands for other(s).

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