In 2008 the UK introduced the Climate Change Act which set a legally binding target of 80% reduction in GHC emissions by 2050 from 1990 levels. System modelling studies indicate that a radical decarbonisation of electricity generation by 2030 is a necessary first step to a wider transition to a low carbon economy, as there are greater challenges perceived for decarbonising other energy intensive sectors such as heat and transport (CCC, 2013). However, low carbon electricity technologies, because of their relative immaturity, capital intensity and low operational costs, do not readily fit with existing electricity markets and investment templates which were designed for fossil fuel based energy. In this talk I will analyse key electricity market reforms and infrastructure policies in the UK, and highlight how these are aimed at making low carbon technologies ‘investable’ by reducing uncertainty, managing investment risks, and repositioning actors within the electricity socio-technical ‘regime’.
The empirical study investigates UK government initiatives to reconfigure electricity markets to create investment certainty for centralised low carbon electricity technologies – notably in ‘mature’ technologies such as nuclear, biomass conversion and onshore wind, but also less mature forms of generation such as offshore wind and CCS. An important ambition of these initiatives has been to attract finance from institutional investors such as pension funds who have not traditionally been involved in direct financing of electricity generation, thus potentially altering the established relationships between government, energy utilities and investors which has characterised the liberalised electricity ‘regime’ in the UK. An underpinning rationale for this low carbon investment orientated strategy is that it will reduce the UK’s exposure to volatility in global fossil fuel markets and give certainty to investors that the UK is committed to a low carbon pathway, thus reducing the cost of capital of large infrastructure investment.
The study is framed through the lens of transitions theory which seeks to account for the transformations of resource intensive socio-technical systems which support the delivery of societal services such as electricity, heating, shelter, and transport (Steward, 2012). This body of literature has however been criticised for adopting a ‘niche-bias’ which over-emphasises the role of disruptive innovations and bottom-up change processes, and views incumbent actors as largely static and resistive to change (Winskel and Radcliffe, 2014, Smith et al., 2005). An in-depth discussion of issues of risk and uncertainty in the context of socio-technical systems, it will be argued argued, can provide new insights into how incumbent regime actors embedded in existing markets and systems are shaping socio-technical change. Placing the analytical focus on investment and incumbency uncovers underlying issues shaping the politics of energy transitions; for example; the societal distribution of investment risks and returns from long term capital investments, how institutions mediate the balance between private returns and wider societal benefits from low carbon investments, and how market and regulatory reforms limit or enable participation in socio-technical transitions.
Ronan is an interdisciplinary energy researcher working as Lecturer in science, technology and innovation studies (STIS) at the School of Social and Political Science, University of Edinburgh. He has an undergraduate degree in mechanical engineering and completed a PhD in energy policy at the Sustainability Research Institute in Leeds.
His work examines the policy, market and regulatory challenges of transforming high carbon energy systems and enabling the deployment and diffusion of low carbon technologies and practices. Drawing from science and technology studies, innovation studies, and governance perspectives, he is interested in the changing relationships between regulators, government, energy companies, users and local authorities in the governance of energy systems in the UK and internationally.
Ronan is part of the Energy and Society Research Group at the University of Edinburgh which brings together energy research in sociology, STIS, social anthropology and political science: http://www.sps.ed.ac.uk/research/research_centres/cross_school_research_clusters/energy_and_society_research_group