Transforming the energy matrix: Transition policies for the development of the distributed energy model (original) (raw)
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This paper explores the equity implications of a transition to a decentralised energy system in the UK. We base our analysis on one of three idealised transition pathways developed by the EPSRC-funded Realising Transition Pathways (RTP) project. Each pathway is characterised by a different mix of technologies, ownership and governance of the energy transition, and stretches from 2010 to 2050. In this paper we focus on the ‘Thousand Flowers’ (TF) pathway, which stipulates a much greater role for civil society in the energy system. Here, civil society actors are instrumental in delivering 50 per cent of final electricity demand from decentralised, low-carbon sources by 2050. Such a radical and systemic transition will require both institutional as well as technological change. The systemic institutional transformation necessary to support wide-spread adoption of community/decentralised energy schemes and the potential distributional impacts have, however, received limited attention to date. To address this gap, we draw on collected outputs of the RTP consortium and extant literatures on community and decentralised energy to explore potential institutional barriers and distributional impacts of the TF pathway. We argue a transition to a TF future would require significant institutional changes to UK energy governance, new municipal and community business models, and new financial and organisational structures in energy ownership. Second, widespread adoption of distributed energy sources would undermine the viability of traditional large power plants; leading to the need for new forms of state support to maintain assets at transmission level. Finally, we contend that expanded community energy provision has the potential to reproduce, or even exacerbate, existing socio-economic and spatial inequalities.
Distributing power: A transition to a civic energy sector
AC alternating current ACS average cold spells CARES Community and Renewable Energy Scheme CCGT combined cycle gas turbines CCS carbon capture and storage CHP combined heat and power DECC Department of Energy and Climate Change DG distributed generation DNO distribution network operators DoE Department of Energy DSO distribution system operators DSP demand side participation EMR Electricity Market Reform EPC energy performance contracts ESC energy supply contracts ESCos Energy Service Companies ESI electricity supply industry EST Energy Saving Trust EVs electric vehicles FiT feed-in tariff GHG greenhouse gas GLA Greater London Authority ICT information and communication technologies LES local energy schemes MO-ESCos Municipally-Owned Energy Service Companies MPPs major power producers NEP National Energy Programme NG National Grid REP Regional Energy Partnerships ROCs Renewable Obligation Certificates RTP Realising Transition Pathways SDES Southampton District Energy Scheme STOR short term operating reserve TF Thousand Flowers pathway TP Transition Pathways Distributing Power: A transition to a civic energy future i Report of the Realising Transition Pathways Research Consortium 'Engine Room' ii Report of the Realising Transition Pathways Research Consortium 'Engine Room' iv Part II: Institutional architecture A major driver behind the Thousand Flowers pathway is the step change in civic participation in energy futures. In this pathway civil society at individual, organisational, and local state levels, plays a much more active role in generation, distribution, and supply. Part II of the report comprises a number of 'institutional scenarios' concerning the various elements of a new institutional infrastructure that is designed to support distributed generation. These consist of: Local Energy Schemes (LES) Currently less than 1% of electricity is generated from local energy schemes (LES) within the UK's civic energy sector; the Thousand Flowers pathway demonstrates the potential for this to grow to a 50% share by 2050. Evidence from other European nations demonstrates that the levels of civic energy generation defined in the Thousand Flowers pathway are possible if the right mix of institutions, resources, finance, and expertise can be developed at the local level. Civic ownership and participation in energy assets can accelerate the deployment of renewable and low-carbon energy generation. This institutional scenario interrogates civic participation in energy generation.
Journal of Environmental Planning and Management
Any discussion of distributed energy systems inevitably centres on how they compare with the large energy systems, i.e. the traditional centralised model of energy production, and on the viability of local energy systems as alternatives in terms of efficiency and sustainability. At present, the debate on local energy systems and distributed energy production hinges mainly on questions of technology and engineering; at most, some reflections on economy are thrown in. What we believe is essential is to cast the net wider and include other dimensions. In particular, we also need to consider in greater depth the organisational and institutional issues involved – until now, less considered and discussed. In this perspective, the main question addressed by the present article is if and how new forms of local organisations can provide the crucial catalyst for a new polycentric distributed energy scenario.
Decentralised Energy: A Global Game Changer
Decentralised Energy: A Global Game Changer
Cover image based on a photography by Andreas Noback, depicting solar panels on the roof of K76, a multi-family home located in Darmstadt, Germany, which received the award "Preis für Innovation und Gemeinsinn im Wohnungsbau" (award for innovation and community spirit in housing construction) of the state of Hessen in 2018. The image was modified using the open-source vector graphic software Inkscape. The font is the open-source font Kenyan Coffee, designed by Raymond Larabie. Praise for Decentralised Energy "In the last few years, renewable energy has broken through the cost barrier. But, if it is to become widely adopted, it has to break through an array of country-specific institutional, technical and political barriers. The strength of Decentralised Energy is that it takes seriously each country's context through a range of country case studies. And yet, it pulls the messages together to give us the common challenges that advocates and promoters of renewable energy and decentralised resources must address to take forward and complete a clean energy transition. " Navroz K. Dubash, Professor, Centre for Policy Research, India "Everyone knows that renewable energy's time has come. An increasingly important issue relates to decentralised resources, and how to use them most efficiently. Governance frameworks and developing new business models are important for both. This book uniquely takes a global view of these intertwined issues, and is a fascinating read for anyone interested in the acceleration of GHG reduction and in coordination factors for a cost effective energy policy. " Dan Kammen, Professor and Chair, Energy and Resources Group, UC Berkeley, Former Science Envoy, US Department of State "Accelerating the energy transformation is in all likelihood this generation's most significant challenge to solve with little room for error. The authors write: "The last decade has witnessed the beginning of what is likely to be a fundamental, irreversible transformation of the power and wider energy sectors, […] [which] entails both regulatory incentives as well as entrepreneurial initiatives. " This book delivers on the high ambition to compare different models and derive critical success factors: it provides a review of different country archetypes with differing needs on their transition paths; on that basis the authors formulate requirements for decisive, transformative top-down governance; they study start-up success stories and categorise underlying business models; and they place these in a three-phased transformation model, concluding on relevant core competencies and success factors. In its essence the book substantiates the "D3"-decarbonisation, digitalisation, decentralisation-as key drivers for the energy transition through a rich range of top-down and bottom up examples. A relevant, timely, and compelling transition synthesis and precious resource for energy transformation practitioners!" Christoph Frei, Partner, Emerald Technology Ventures (and former CEO & Sec Gen of World Energy Council) Contents A note from the authors-editors xiii Glossary xvii 2 Regulatory and policy incentives-how to establish governance for decentralised energy systems? 2.1 The role of regulation and governance 2.1.1 Regulation as accelerator or decelerator of the energy transformation 2.1.2 An assessment of governance practices in key transformation countries 2.1.3 References 2.2 Australia: from central electricity to solar/storage systems 2.2.1 Introduction 2.2.2 The Australian electricity framework 2.2.3 Australia's renewable energy resources 2.2.4 DER in Australia 2.2.5 Disruption within the electricity industry 2.2.6 The future of the Australian electricity system 2.2.7 Conclusion 2.2.8 References vi Decentralised Energy-a Global Game Changer 2.3 China: bureaucratic and market hurdles to move from a central towards a decentral energy system 2.3.1 Introduction 2.3.2 Growth in renewable energy 2.3.3 Phases of the development of distributed energy development 2.3.4 Lessons from the five-year plans 2.3.5 Developing distributed solar energy systems in China: challenges and prospects 2.3.6 Creating system flexibility 2.3.7 Conclusion and prospects 2.3.8 References 2.4 Denmark: centralised versus decentralised renewable energy systems 2.4.1 Introduction 2.4.2 Phase 1: 1975 to 2000-the development of efficient single renewable energy technologies 2.4.3 Phase 2: the need for an integration infrastructure 2.4.4 Decentralised smart energy systems versus centralised power transmission line scenarios 2.4.5 Conclusion and policy recommendations 2.4.6 References 2.5 Germany: from feed-in-tariffs to auctions and the question of diverse actors 2.5.1 Summary 2.5.2 Decentralised citizen energy in Germany 2.5.3 Drivers for-and against-decentralised renewable energy in Germany 2.5.4 Change of funding regime by amendment of the EEG in 2014 2.5.5 Decentralised citizen energy and actor diversity at risk? 2.5.6 Conclusions 2.5.7 References 2.6 India: dirty versus clean decentralised energy generation 2.6.1 Introduction 2.6.2 A brief history of systemic changes 2.6.3 Potential for decentralised energy Contents vii 2.6.4 The drivers of decentralised energy 2.6.5 Outcomes 2.6.6 References 2.7 Italy: network costs versus decentralised system 2.7.1 Introduction 2.7.2 The impact of European policies on the decentralisation of the Italian electricity market 2.7.3 The status of decentralisation in the Italian electricity market 2.7.4 The Italian regulation for distributed energy resources 2.7.5 Conclusions 2.7.6 References 2.8 California versus New York: policy implementation via Investor-Owned Utilities or Distribution System Provider? 2.8.1 Introduction 2.8.2 California 2.8.3 New York state 2.8.4 Comparison of California and New York energy policies 2.8.5 References 2.9 Conclusions and reflections from the country reports 2.9.1 The eight requirements of transformative governance 2.9.2 The way forward: transformation and acceleration 2.9.3 References 3 Business models beyond subsidies-which core competencies are needed? 3.1 Energiewende 1.0-3.0: matching phases of energy transition and business models 3.2 Start-ups pave the way towards a new energy system 3.2.1 References 3.3 Envio Systems: redefining building efficiency-Envio Systems targets an untapped legacy market 3.3.1 Technology and business model 3.3.2 History and organisation 3.3.3 Scaling and cooperations 3.3.4 Market outlook and competitive environment viii Decentralised Energy-a Global Game Changer 3.3.5 Interviewee biography 3.3.6 References 3.4 Timo Leukefeld: a business model for an energy-autonomous house without subsidies 3.4.1 Technology 3.4.2 Business model 3.4.3 Scaling 3.4.4 Market outlook and competitive environment 3.4.5 Interviewee biography 3.4.6 References 3.5 Entelios: Demand Response-a decentralised approach to complement intermittent renewable energies 3.5.1 Technology and business model 3.5.2 Scaling and cooperations 3.5.3 Market outlook and competitive environment 3.5.4 Interviewee biography 3.5.5 References 3.6 SOLshare: decentralised energy supply-complementary or antagonistic to rural electrification 3.6.1 Technology and business model 3.6.2 History and organisation 3.6.3 Scaling 3.6.4 International expansion 3.6.5 Market outlook and competitive environment 3.6.6 Interviewee biography 3.6.7 References 3.7 Mobisol: developing a pioneering business model for off-grid energy in East Africa by starting with the users 3.7.1 Context and origin of the idea 3.7.2 Phase 1 (pilot phase): what do we provide then, really? 3.7.3 Phase 2 (becoming operational): how do we sell? 3.7.4 Phase 3 (commercial roll-out): how do we finance our growth? 3.7.5 Phase 4: how to become a market leader? 3.7.6 Summary-finding new ways to serve the underserved 3.7.7 Author biography Contents ix 3.8 Solarkiosk: social enterprise and decentralised energy 3.8.1 Technology and business model 3.8.2 History and organisation 3.8.3 Scaling and cooperations 3.8.4 Market outlook and competitive environment 3.8.5 Interviewee biography 3.8.6 References 3.9 Power Ledger: peer-to-peer trading with Blockchain as decentralised transaction technology 3.9.1 Technology and business model 3.9.2 History and organisation 3.9.3 Scaling and cooperations 3.9.4 Market outlook and competitive environment 3.9.5 Interviewee biography 3.9.6 References 3.10 Core competencies in the energy transition-insights for corporate and political decision makers 3.10.1 Three new business models for dealing with the energy transformation 3.10.2 Six core competencies for corporate decision makers 3.10.3 A world of entrepreneurial activity 3.10.4 References 4 The three phases of the energy transformation-combining governance and business model innovation 4.1 Three phases of the transformation 4.2 Phase I (Energiewende 1.0): grid-based and connected energy system with decentralised renewables as a niche (<10 per cent) 4.2.1 Governance of Phase I: centralised system regulation promoting renewables, local industry, and lead markets 4.2.2 Business models and core competencies of Phase I 4.3 Phase II (Energiewende 2.0): decentralised renewables growing in importance with partially autonomous solutions 4.3.1 Governance of Phase II: setting the ground for Energiewende 3.0 with performance-based regulation 4.3.2 Business models and core competencies of Phase II x Decentralised Energy-a Global Game Changer 4.4 Phase III (Energiewende 3.0): decentralised renewables as dominant player with fully autonomous solutions 4.4.1 Governance of Phase III: consumer-focused, ambition-driven regulation 4.4.2 Business and core competencies of Phase III 4.5 References 5 Global game changer-leading the future 5.1 Six reasons for decentralisation as the key driver of the global energy transformation 5.2 Preparing for the three phases of the energy transformation: the 8+3+6 model 5.2.1 Regulation and governance: eight key principles for political decision makers 5.2.2...
Sustainability, 2019
Although a certain degree of consensus seems to pervade the ideas of "distributed energy systems" and "energy communities", in truth, diverse views are involved. This article aims to shed light on the variety of interpretations of these two concepts. In particular, the article critically considers the answers to the following four questions: What exactly is meant by "distributed" in the expression "distributed energy generation"? Why is distributed generation (ethically) desirable? Why should people consider it a positive idea that "communities"-and not individuals or families-are invited to manage distributed generation systems? Lastly, can energy communities be considered different from standard state intervention and from market systems? Clearly defining these questions helps in emphasising crucial differences, and it is an important step toward achieving a critical understanding. The conclusion is that there is no single interpretation for either the idea of distributed energy or that of energy communities. Shifting emphasis from one feature to another can drastically affect what policies are required to foster the creation of such communities and of a distributed energy production scenario.
2015
The overarching challenge for UK energy policy is to ensure the delivery of secure, affordable energy in a way that meets the emission reductions targets laid out in the Climate Change Act (2008). The EPSRCfunded Transition Pathways (TP) and, more recently, Realising Transition Pathways (RTP) projects have both argued that multiple logics of governance, ownership, and control of the electricity system can be followed to address the energy trilemma. This work has developed three transition pathways for the UK energy system, each driven by different governance patterns. Each pathway has a specific technological mix, institutional architecture, and societal drivers. These pathways are: Central Co-ordination: Central to this pathway is the role of the nation state in actively delivering the transition. Market Rules: After the creation of a broad policy framework, the state allows competition and private companies to deliver sustainable, affordable energy. Thousand Flowers: This pathway ...
FLOK policy paper on distributed energy
2014
In the follow-up section, Alternative models: distributed energy, we explore the distributed energy model as a viable alternative to centralized models based on private property and describe briefly its main features: (a) the use of renewable energy sources, (b) the empowerment of consumers through the democratization of the means of energy production and distribution and (c) the communal management of the relevant infrastructure. Our analysis suggests that power generation could be much more efficiently organized as a commons, rather than as a commodity, the recognition of which should be the fundamental principle underlying all public policy proposals aimed at the transformation of the energy sector.
Decentralised and centralised energy: a property rights analysis
International Journal of Global Energy Issues, 2007
Interconnection between centralised and decentralised electrical power sources remains a contentious issue on technical, economic, and policy grounds. This paper considers the problem of interconnection as a property rights problem-one that involves allocation conflicts and pressures for institutional change. We argue that the current policy approach to interconnection problems between distributed-generation power sources and the distribution grid in California should take more careful account of changing property rights characteristics of the distribution grid. We review two emerging property rights frameworks-community choice aggregation and public power cooperatives/municipalities, which may help overcome such interconnection barriers.