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Shifting political power: the nature and consequences of distributed renewable energy transitions

Periodic Reporting for period 1 - POWERSHIFTS (Shifting political power: the nature and consequences of distributed renewable energy transitions)

Reporting period: 2017-09-01 to 2019-08-31

Decentralisation of energy is progressing rapidly. However, shifting ownership of energy is highly political. Firms in centralised systems have actively opposed policies that facilitate increased decentralisation as they seek to protect their market shares and profits. As communities of decentralised generators grow, they have developed capacity to intervene in political systems. The result is a highly contested political arena.

The implications of shifting ownership in electricity systems are profound. Incumbent generators wield significant influence over energy policy processes. An electricity model where ownership is more decentralised implies a decentralisation of political influence and disruption of established power balances. Where incumbent firms aim to maximise profits, many decentralised generators operate under business models that limit profits, or that have explicit social impact imperatives. A redistribution of political power in favour of decentralised interests has the potential to shift the operating logic of electricity systems. There is a hope that decentralisation will make it more possible to realise the social and environmental objectives needed to address existential threats imposed by both climate change and increasing global wealth inequality. However, there is no research on the extent to which these changes are occurring. The Powershifts project examined the growing impact of decentrally-owned renewable electricity projects on political decision-making systems across the OECD through 3 objectives.

(1) examine the conditions leading to shifts in political power;
(2) assess the mechanisms by which political power shifts are occurring; and,
(3) identify the consequences of political power shifts for energy systems and outcomes.

These objectives were explored through 3 in-depth case studies in The Netherlands, England, and the Canadian province of Ontario. An OECD-wide survey of policy makers that expands upon the case study findings is still in progress.

In brief, political power is shifting. This is largely visible through an increase in the capacity of decentralised actors, an increased ability to build political coalitions, and a rescaling of action on energy from the national to the local or regional level. These trends can be expected to continue and will result in a substantial reorganisation of political power relationships in energy policy arenas.
The project duration was 12 month and 2 weeks. It was terminated early because I accepted a position as a permanent Lecturer at the University of Sussex. However, work on the project is ongoing, now funded by the University of Sussex. Work completed during the initial project included iterative development of the conceptual framework, selection of cases, interviews and document collection for all cases, analysis of results for NL and Ontario, submission of an article on the conceptual framework in Energy Research & Social Science, and preparation of the OECD-wide survey.

Results to date are presented in a paper that is currently under review in Environmental Innovations and Societal Transitions. Results are summarised as follows:

Is political power shifting?

Yes, political power is shifting as a result of increasing influence exercised by organised decentralised electricity interests. However, influence depends significantly on the orientation and positioning of the state.

Through which mechanisms is political power shifting?

Power is shifting through three key mechanisms:

(1) Decentralised renewable energy communities (RECs) are now sufficiently well established to be able to intervene effectively in political processes through normal political channels. They have ever increasing technical and institutional capacity. However, there are still challenges in regimes where the state is unsupportive of decentralisation.

(2) RECs are increasingly adept at building political coalitions to increase their policy impact. This is most often with renewables companies and industry groups that operate under traditional business models; environmental, health and social NGOs; and, local, municipal and regional authorities and cities.

(3) There is an ever-increasing push to rescale actions and decision-making on electricity to local or regional levels. In some cases, this rescaling is coordinated by the state. Where the state is unsupportive of decentralisation, this role is being claimed. Cities and municipalities are increasingly interested in energy and are often positively-inclined toward decentralised ownership because they recognise associated benefits regarding local economic development, improved health outcomes, and an increase in environmental behaviours. Non-state groups possess the resources and technical capacity to realise electricity projects and are doing so regardless of state approval, in ways that are sometimes subversive. Where states are unsupportive of decentralisation, it is increasingly clear that uncoordinated development at local, regional and individual levels will make it more difficult to realise many of the social and technical benefits associated with decentralisation. It may also prove a threat to overall energy security if uncoordinated development stresses the physical capacity of the electricity grid.

What do political power shifts mean for the future?

There is still limited evidence regarding what these early shifts in political power mean for the future. Recent requirements from the EU that member states support the development of locally controlled, non-profit oriented RECs will significantly increase the number of decentralised owners. It also means that states will be mandated to consider these interests as part of the electricity system. It is likely that impacts will be significant.

The project has resulted in 1 published academic article with another two under review. There is also a policy brief, an article in Energy World, and interim results that were sent to Ontario. The project and results have been presented at 9 international conferences.

Exploitation of Results:

Results have been requested by the IRENA Geopolitical working group, and by government and industry associations in the UK. There is also impact through Twitter: @powershifts1
The project has proved very relevant as decentralisation of electricity has proceeded more rapidly than expected. This work is the first empirical assessment of the impact of decentralised energy ownership on political systems and outcomes. It demonstrates that there are significant impacts for those exercising political power in the energy sector. These impacts will increase and cause widespread political turbulence as market shares, scale of governance, and key energy players shift. There is an emergent renegotiation of political power relationships, with consequent impacts on international geopolitical relationships.

The completion of the survey is expected to confirm case study findings. These results will be useful for wider energy system governance and planning. If states are able to anticipate trends in decentralisation, and take proactive action, they will be better able to ensure stable, secure and affordable energy systems. Proactively addressing sociotechnical and political trends associated with decentralisation will also enable states to design policies that ensure that it is not only the wealthy that reap the benefits of decentralisation.
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