A quantitative, cross-country evaluation of responsive deployment policies to accelerate sustainability transitions cost-efficiently
ETH Zurich, Switzerland
A clean, affordable, and secure energy provision features prominently in most visions of a sustainable world. Despite the diversity in the pathways to arrive at a sustainable energy system, they all share the need for a rapid transition toward clean energy technologies. Unfortunately, many of those technologies are not diffusing at a pace consistent with limiting global warming to below 2°C, as agreed in the Paris Accord, much less to below 1.5°C. Accelerating sustainability transitions, thus, requires speeding up the adoption of clean energy technologies.
Deployment policies that aim to foster the uptake of clean energy technologies through economic incentives, such as feed-in tariffs, have been among the most effective policy tools to boost the growth of technologies, such as solar photovoltaics (PV). Similar policies could accelerate the diffusion of other technologies, such as energy storage, electric vehicles or renewable heating, which could enable the decarbonization of electricity, transportation and heating. However, countries such as Spain, Italy or the Czech Republic abandoned their support policies for solar PV after installations boomed and sent annual costs from a few hundred to thousands of million euros. These experiences have raised concerns about the cost-efficiency of deployment policies, eroded public support for them, and slowed down the transition to cleaner energy.
In order to regain confidence in deployment policies so that they can be widely implemented without risking repeating the mistakes of the past, the design of the policies needs to be revisited. Countries that implemented deployment policies and experienced long periods of very low adoption levels followed by booming years and spiralling policy costs failed to adjust policy incentives quickly and adequately enough to the evolution of diffusion and technology prices.
Over the years, policy-makers tried out several policy designs for steering adoption towards the deployment targets while reining policy costs: First, replacing periodic reviews with pre-set incentive reductions, and, later, by introducing responsive adjustments. However, neither of these policy designs succeeded completely in maintaining deployment policies both effective and cost-efficient. Even if they worked in one country, they often failed when applied in others. Thus, to exploit the potential of deployment policies for accelerating sustainability transitions across multiple countries, there is a need to identify what policy designs for adjusting incentives over time produce more effective and cost-efficient policies that work well in different countries.
In this paper, we address this gap with a quantitative, cross-country evaluation of policy designs to adjust a feed-in tariff policy for solar photovoltaics in three European countries: Germany, Spain and Switzerland. These three countries experienced challenging, but markedly different evolutions of their solar PV socio-technical systems. Despite using similar policy designs, Germany reached a high level of deployment at moderate policy costs, Spain a low deployment at very high costs, and Switzerland ran into moderate adoption at low policy costs. We use an agent-based model of solar PV adoption in each country to simulate six policy designs, three historical and three novel ones, each with a different degree of responsiveness in the timing and the size of the incentive corrections.
Our study identifies under which factors the use of one policy design or another may be more advisable, providing a wealth of information for future deployment policies targeting technologies such as energy storage, electric mobility, or renewable heating. Furthermore, we reveal the important role of policy responsiveness by comparing policy designs that are able to adapt to a larger or smaller degree to the evolution of the socio-technical system in which they operate. We contribute to the literature on sustainable transitions, and technology policy.
Understanding speed and scale of transitions: Expectation alignment between niche and regime actors
Science Policy Research Unit, Business School, University of Sussex, United Kingdom
The concept of ‘alignment’ among actors is identified as essential for sustainability transitions. However, there is limited conceptual and methodological understanding of how actors’ alignment could contribute to fast transition, i.e., the fast speed of change of the socio-technical system. Extant sustainability transition studies articulate the crucial role of actors’ expectations for the transition during the niche stabilisation process. In this paper, we argue actors’ expectations of niches are not born in a vacuum but are intertwined with the expectations of regime’s (in)capability to adapt to the external pressure or internal crisis, and their expectations of the social trends and systems’ external environment. We distinguish actors’ expectations at niche, regime and landscape level. We argue the alignment between niche and regime actors’ expectations at these three levels is crucial for the sustainability transitions, through two mechanisms, niche stabilisation and regime destabilisation.
We develop a framework that conceptualises three different alignment patterns between niche and regime actors’ expectations to help us understand the speed and scale of transition. We articulate the semi-coherence of the socio-technical system, of which the actors are heterogeneous and embedded in the five different subsystems (science and technology, political, industry, market and culture). The transition process could be seen as a reconfiguration process of these five elements. To retrace the niche stabilisation and regime destabilisation process, we measure the broadness of alignment between niche and regime actors’ expectations at the three levels. We conceptually distinguish three different alignment patterns, strong alignment, weak alignment and semi-strong alignment. A heuristic measurement tool is provided to explore actors’ expectation dynamics over time.
To explore the plausibility of our conceptual framework, we introduce a threshold of speed and scale of transition. We then apply our framework to two cases, solar and wind power development in China from 2000 to 2017, characterised by distinctively large scale and fast growth in an energy system dominated by coal power. The case studies build on several data sources, which have been cross-referenced, including actors and institutions mapping in China’s electricity sector, twenty-two semi-structured interviews, six informal interviews, group discussions, plenary and panel discussions and presentations. The respondents are experts from China’s thermal power companies, grid companies, solar and wind power companies, industry associations, government, research institutes, NGOs and international organizations. The study adopts a three-step combined coding approach.
The paper sheds lights to the understanding of fast sustainability transition and the role of actors’ expectations. In this case, generally, niche and regime actors are distinguished- with different mind-sets, interests and resources. They hold different perceptions toward emerging technologies. Their collective actions are regarded as crucial for fast transition. The paper provides a new way of thinking about the alignment dynamics between niche and regime actors in response to calls for more conceptual understanding and frameworks to analyse interactions between the niche and the regime for sustainability transitions. The paper argues that expectations, as a special set of cognitive rules, orient actors’ actions towards the future and play a crucial role for sustainability transition, through two mechanisms, niche stabilisation and regime destabilisation. Our two cases reveal the niche and regime actors’ expectation dynamics at three levels, and present the correlation between their alignment patterns and the speed and scale of transition. For a fast transition, there needs to be a virtuous support circle among three different levels of expectations and strong alignment between niche and regime actors.
Innovation Policy Challenges and Implications for the Construction and Use of Pilot and Demonstration Plants to Commercialize New Technologies and Accelerate Sustainability Transitions
1Chalmers University of Technology, Sweden; 2Luleå University of Technology, Sweden
One important requirement for sustainability transition and moving towards a decarbonized energy system is the redirection and acceleration of technological change to develop less emission-intensive technologies. To this end, pilot and demonstration plants (PDPs) represent the bridge between research and development on one hand as well as up-scaling and commercialization on the other hand. PDPs address not only technical challenges, but also reduce the organizational-, market-, and institutional risks and uncertainties that key stakeholders face in developing these new technologies. In this perspective, PDPs can also be interpreted as fundamental inceptions of new values that are not predetermined by innovation but actuated through complex processes of value co-creation in society and markets. Failure to support the demonstration and early deployment of the new technology would mean a waste of resources applied earlier in the innovation cycle for research and development. Demonstrating a promising technology at large or full scale involves major costs and risks for the technology developer if the technology should fail. Thus, public support and investment for the construction and use of PDPs, particularly, for first-of-a-kind industrial-scale demonstration projects is a focal point of governmental investments both on a regional, national and supranational-level for strengthening the competitiveness of industry and tackling the barriers that hold back private investment.
Although prior research highlights that PDPs play an important role in developing new technologies and industrial-scale production, but also in building the broader socio-technical system, the literature provides limited insights into how to design and implement public policy measures to support the construction and use of PDPs for technology development. A few studies have assessed the outputs and eﬀectivnress of public fund instruments for the construction and use of PDPs in the context of energy technologies, However, these studies are often investigated the effects of one individual policy instruments, rather than to policy mixes on the construction and use of the PDPs, which are important in the commercialization of sustainable energy technologies. These studies also primarily address PDPs development from a national perspective and at a single level of government, and thus (in part) downplay the role of international collaborations. Furthermore, previous literature often has neglected the wider processes of building the socio-technical system around PDPs and the role of public policy on it. Finally, the literature still needs for a more ﬁne-grained insight into how PDPs contribute to market formation for new technology. Drawing insights from Policy Feedback Theory (PFT) and Strategic Niche Management theory (SNM), the purpose of this study is to address how policies– and combination of policy instruments- and the interplay between them on various levels stimulate the construction and use of PDPs, and through what type of mechanisms PDPs contribute to market formation for a new technology, and consequently accelerate sustainability transitions.
This study focuses on primarily publicly-funded large-scale demonstration plants related to advanced biofuels technologies. Our empirical material is based on document reviews of the calls and progress report of the demonstration plants, complemented with interviews with key people involved in the demonstration plants. This approach enables us to investigate which role different type of policy instruments on an EU, national and regional level play for realizing the PDPs, and to derive insights concerning the role of PDPs in creating a market for the technology, and subsequently in formulating innovation policy. The study contributes with new insights into the challenges of innovation policy in a PDP context and shows how the market conditions from a policy perspective can be improved. It is also explained that how PDPs contribute to the market formation by developing a dynamic model of stakeholder interaction and gaining legitimacy for the technology.