Post on 29-May-2015
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Sussex Energy Group, SPRU
Governing infrastructure interdependencies
Jim WatsonResearch Director
UK Energy Research Centre
International symposium for next generation infrastructureIIASA, Vienna Austria, 30th Sep – 1st Oct 2014
Sussex Energy Group, SPRU
Outline
• Why is governance important?
• Infrastructure transitions: a historical perspective
• Governing interdependencies: two case studies
• Conclusions & implications
Sussex Energy Group, SPRU
Why is governance important?
‘Large scale technology, such as electric light and power systems, incorporate not only technical and physical things such as generators, transformers and high-voltage transmission lines, but also utility companies, electrical manufacturers and reinforcing institutions such as regulatory agencies and laws …’
Thomas Hughes (1989) American Genesis
Sussex Energy Group, SPRU
Why is governance important?Not just government …
‘This plan sets out how the UK will achieve decarbonisation within the framework of our energy policy: to make the transition to a low carbon economy while maintaining energy security, and minimising costs to consumers, particularly those in poorer households.’
The Carbon Plan, 2011
Sussex Energy Group, SPRU
Shift to governance partly due to ‘hollowing out’ of the State: liberalisation and globalisation• Power has transferred ‘upwards’ (e.g. to the EU,
multilateral agreements)• It has also transferred ‘outwards’ (e.g. to regulatory
agencies; public-private partnerships)• In some cases, there has also been decentralisation and
devolution (e.g. to Scottish government)
Governance means decision-making by multiple actors, including government(s), private sector and civil society
But there is no ‘one size fits all’ model
Why is governance important?... but also multiple actors & views
Sussex Energy Group, SPRU
Why is governance important?... but also multiple actors & views
Sussex Energy Group, SPRU
Governing interdependencies
Sussex Energy Group, SPRU
‘We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy … I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use. Because America will develop this resource without putting the health and safety of our citizens at risk.’
Barak Obama, Jan 2012
Governing interdependencies
Sussex Energy Group, SPRU
Governing interdependencies
Sussex Energy Group, SPRU
The ‘Industrial Revolution’ (machines, factories and canals) 1771
Age of Steam, Coal, Iron and Railways 1829
Age of Steel and Heavy Engineering (electrical, chemical, civil, naval)1875
Age of the Automobile, Oil, Petrochemicals and Mass Production1908
Age of Information Technology and Telecommunications1971
Age of Biotech, Bioelectronics, Nanotech and new materials?20??
Infrastructure transitions5 technological revolutions (Perez, 2010)
INSTALLATION PERIOD DEPLOYMENT PERIODTURNINGPOINT
Bubbles of first globalisation
Belle Époque (Europe)“Progressive Era” (USA)1890–95
Railway maniaThe Victorian Boom1848–50
Canal maniaThe GreatBritish leap1793–97
Internet maniaand financial casino
Global Sustainable ”Golden Age”?
2007/08
-???
The roaring twenties Post-warGolden age
Europe1929–33
USA 1929–43
1771Britain
1829Britain
1875 Britain / USA
Germany
1908 USA
1971 USA
1st
2nd
3rd
4th
5th
GREATSURGE Bubble prosperity Maturity“Golden Age” prosperityCollapse &
Recessions
Infrastructure transitions, the economy and society
Source: Perez, 2010
Sussex Energy Group, SPRU
Age of Steam, Coal, Iron and Railways 1850s-1860s
Urban, industry-based VICTORIAN LIVING in Britain
DEPLOYMENT PERIOD LIFESTYLE
Each style became “the good life” redefining people’s desires and guiding innovation trajectories
Age of Steel andHeavy Engineering 1890s-1910s
Urban, cosmopolitan lifestyle ofTHE BELLE EPOQUE in Europe
Age of the Automobile, oil and Mass Production 1950s-1960s
Suburban, energy-intensiveAMERICAN WAY OF LIFE
2010s-20??s
Will the developed and emerging countries develop a variety of ICT-intensive and “glocal” SUSTAINABLE LIFESTYLES?
Age of global ICT
Infrastructure transitions and changes in lifestyles
Source: Perez, 2010
Sussex Energy Group, SPRU
Significant differences between sectors, especially with respect to scale of governance
Complexity of governance increased due to liberalisation, but liberalisation can also have benefits (e.g. greater transparency)
Economic regulation of networks has improved efficiency, but has not fostered innovation until recently
Governance usually has multiple objectives: trade-offs between these objectives are inevitable
Not enough focus on governing interdependencies
Infrastructure governanceRecent UK experience
Sussex Energy Group, SPRU
Governing interdependenciesTwo case studies
Water-electricity interdependencies:
Renewable energy in the water sector
Electricity-transport-ICT interdependencies:
Smart grid demonstrations
Sussex Energy Group, SPRU
Governing interdependenciesTypes of interaction (Raven & Verbong)
Sussex Energy Group, SPRU
Nature of interdependencies has changed over time:
• Symbiosis before privatisation of infrastructure sectors
• During privatisation period, links became stronger:• Stronger symbiosis due to regulations on water quality• Some spill overs of rules for economic regulation• Integration via mergers, though these became less attractive• Common environmental regulator (Environment Agency)
• Post privatisation, some limited competition (renewable electricity generation by water companies) and integration
Governing interdependenciesWater and electricity
Sussex Energy Group, SPRU
• Strong national and international (EU) environmental agendas: improve water quality and reduce emissions
• A shift to an integrated environmental regulator, but internal ‘silos’ and separate economic regulators
• Competing priorities for government and regulators: water quality vs energy demand / emissions reduction
• Some integration of sectors, but this was short lived due to these competing priorities:• Renewable energy generation by water companies• Cross-sector mergers to form ‘multi-utilities’
Governing interdependenciesWater and electricity
Sussex Energy Group, SPRU
• Increasing symbiotic interactions between the ICT and electricity sectors since the 1960s, and between electricity and private vehicles sectors more recently
• Some integration between the ICT and electricity sectors: ICTs used by electricity distribution network companies to manage ‘big data’
• Smart grids are likely to require greater levels of integration. Governance integration still at an early stage
Governing interdependenciesElectricity, ICTs and private vehicles
Sussex Energy Group, SPRU
• Smart grids being driven by electricity network regulation in the UK: increased coordination between government and industry including large ICT players
• Large differences between sectors: regulation, life cycle of assets and products, levels of competition, innovation, relationships with final consumers
• Relationships between sectors tends to be “ad hoc” due to lack of critical mass of demand for services (both EV and smart grid solutions)
• Consumer trust is an important issue for both electricity and ICT sectors
Governing interdependenciesElectricity, ICTs and private vehicles
Sussex Energy Group, SPRU
Governing interdependenciesElectricity, ICTs and private vehicles
I don’t want no company saying like ‘well right about now your machine’s not going to work because it’s high peak [...]’ it’s like it becomes to know your habits, it knows how you operate, that’s kind of scary
Anonymous participantUKERC public workshop on smart grid scenarios
The answer is GE. What is the question?
Distribution company procurement officer, 2014
Sussex Energy Group, SPRU
Governance reform?
Integrated infrastructure regulator?
Sussex Energy Group, SPRU
‘Fracking has become a national debate in Britain – and it’s one that I’m determined to win. If we don’t back this technology, we will miss a massive opportunity to help families with their bills and make our country more competitive. Without it, we could lose ground in the tough global race.’ David Cameron, Aug 2013
Governance reform?
Sussex Energy Group, SPRU
Thanks
http://www.ukerc.ac.uk
https://twitter.com/watsonjim2