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Renewable Energy C ooperatives and T he D ecentralization of E lectricity P roduction

Renewable Energy C ooperatives and T he D ecentralization of E lectricity P roduction. Thomas Bauwens Centre for Social Economy (HEC- ULg ) Florence, 06/06/13. Outline. The phenomena of path-dependence and lock -in: application to the electricity sector

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Renewable Energy C ooperatives and T he D ecentralization of E lectricity P roduction

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  1. RenewableEnergyCooperatives and The Decentralization of ElectricityProduction Thomas Bauwens Centre for Social Economy (HEC-ULg) Florence, 06/06/13

  2. Outline • The phenomena of path-dependence and lock-in: application to the electricitysector • The roles of consumers in the electricity production

  3. 1.Path-dependence and lock-in • Introduction of dynamics in the alignment/coherenceframework (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 anotherimplies important costs, which arise from the inertia of pasttechnological and institutionalchoices

  4. 1.Path-dependence and lock-in • David and Arthur: technologies spreadaccording to an auto-enforcingprocess • Existence of increasingreturns to adoption • Economies of scale • Network externalities • Learning externalities • Adaptive excpectations • Adaptation of thisframework to social institutions (North, 1991)

  5. 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 betweenthosefactorsthatmutuallyreinforcethemselves to createinertia in the technologicaltrajectories of oureconomies

  6. 1.Path-dependence and lock-in

  7. 1.Path-dependence and lock-in

  8. 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 liberalisedmarket” (Künneke, 2008)

  9. 2.The roles of consumers • Crettenand & Finger(2013): three main actors • Institutionalactors (politicalauthorities, regulators, etc) • Technologicalactors: have the possibility to innovate and develop technologies • Marketactors: provide the service of the given network industry • And… consumers! • The governance of infrastructures as common pool resources (Finger & Künneke, 2008) • Place for ThirdSectororganizations in the governanceregime • 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

  10. 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 technologiesinto the market which will depend on consumers’ acceptance of micro-generation technologies. The need for acceptance will in turn depend on the extent to which consumers are actively involved in the micro-generation deployment” (Sauterand 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

  11. 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

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