1. Introduction to socio-technical approach of the Centre on Innovation and Energy Demand (CIED) Prof. Frank Geels (Univ. of Manchester) CIED summerschool, July 2017

2. Structure
1. Introduction: Energy efficiency debate and policy-relevant knowledge questions
2. Low-energy innovation and transitions
3. CIED’s socio-technical approach
4. CIED research themes
5. Conclusion

3. 1. Introduction
Energy demand reduction and energy efficiency important new policy topics
* DECC (2012)The Energy Efficiency Strategy
* DECC (2014) UK National Energy Efficiency Action Plan
* IEA (2014), Capturing the Multiple Benefits of Energy Efficiency

4. Also some successes UK final energy consumption by sector (DECC, 2014)
Fuel-efficient cars, light bulbs, boilers, insulation, double glazing are part of explanation (besides crisis, de-industrialization, ‘peak car’ etc..)

5. Electricity consumption by domestic appliance, by broad type, UK (DECC, 2015)

6. But problems for middle- to long-term
Expected rising demand in 2020s (without new policy)
UK final energy consumption compared against carbon plan scenarios, (DECC, 2012)

7. Diminishing returns of established options (limited further diffusion potential of ‘low hanging fruit’)
Degree of penetration/diffusion of various energy efficient measures in UK homes (DECC, 2012)

8.  Energy efficiency revolution
So, long-term demand strategy requires an energy efficiency revolution
“The Government wants to revolutionise the UK’s approach to energy efficiency” (DECC, 2013: 7).

9. Requires new knowledge
“Understanding how people and communities might respond to things like the introduction of new energy technologies, electric vehicles or insulation programmes is crucial to ensuring that our policies can be successful” (p. 40). (DECC, 2012, Science and Innovation Strategy)

10. DECC’s (2012) Energy Efficiency Strategy (p. 56)
“Currently we lack deep understanding of the complexities of what really drives energy demand and how to change it at user and provider level. If these complexities are to be understood, energy demand research must adopt inter-disciplinary, multi-agency approaches to deliver understandings of:
* The lifestyle and social drivers of the demand for energy services
* Changing technologies and how they are adopted at the point of use
* The institutional and policies framework within which technical and social decisions are made.
* The interactions between all of these.”
 CIED research centre aims to address these questions + wants to interact with stakeholders (‘knowledge co-development’)

11. 2. Low-energy innovation and transitions
* Innovation is about new options
* Which deviate in one or more dimensions from existing situation
* Entail uncertainty (about price/performance, precise demand, impact) [which creates problems for calculations and models]
* Offer substantial improvement promise (especially more radical innovations and new systems)
* But also encounter various ‘barriers’: economic, social, political, cultural, infrastructural

12. Variety of low-energy innovations
Energy efficiency revolution requires shift in kinds of ‘solutions’:
From individual (well-known) technical measures to more novel low energy innovations and systems (social and technical)

13. 3. CIED’s socio-technical approach
Two general assumptions:
Innovation is not R&D (invention),
but introducing novelties in markets
and other environments
 Creation or reconfiguration of socio-technical systems

14. Innovation as building or reconfiguring socio-technical systems

15. 2) Low-energy innovation as a multi-actor process
From ‘individuals and firms’ to wider social systems:
* Economics: Investments, prices, markets, competition
* Policy and politics: Policy goals, instruments, institutions
* Socio-cultural: Public debates, beliefs, motivations, practices

16. So, current policy framing is too narrow
Currently: Mainstream economics focus on individuals (mostly ‘firms’ and ‘households’)
Underlies emphasis on four ‘barriers’ (DECC, 2012, Energy Efficiency Strategy)
1. Embryonic markets
2. Information
3. Misaligned financial incentives (e.g. landlord-tenant)
4. Undervaluing energy efficiency
This approach neglects non-economic barriers and range of other relevant actors and contexts.

17. Multi-level perspective on socio-technical transitions
* Radical innovation in niches (variation/novelty) * Struggling against existing regimes * In context of broader ‘landscape trends’

18. Niche-level: Nurturing radical innovation
Niches offer protection from mainstream market selection
Often carried by entrepreneurs, outsiders, communities, small social networks
Emphasis on learning, experimentation, upscaling, enrolment of more actors, upscaling

19. Endogenous momentum of niche-innovations
Economic and business dynamics:
a) Learning-by-doing (learning curves)
b) Increasing returns to adoption (scale economies, network externalities)
c) Strategic games between firms and innovation races (‘jockeying for position’)
Socio-cognitive and cultural dynamics:
Expanding social networks
Building skills, knowledge, capabilities
Develop positive discourses/visions to create socio-political legitimacy
Policies, power and politics:
Supportive regulations, subsidies, investment
Requires advocacy coalitions with political power (business, NGOs, media)

20. Regime-level: Lock-in, path dependence, incremental change
Economic:
Scale advantages, low cost
Sunk investments (competence, infrastructure)
Social/organizational:
Incumbent firms have vested interests, mind-sets, routines
Alignment between social groups (‘social capital’)
User practices, values, life styles
Politics and power:
Uneven playing field (policies favour status quo)
Opposition to policy change from vested interests

21. Socio-technical landscape
Exogeneous backdrop
Slow-changing secular trends (demographics, macro-economics, ideology, climate change) and shocks (economic crisis, oil shock, wars)

22. Dynamic multi-level perspective on socio-technical transitions

23. 4. CIED research themes 4.1. Emergence of low-energy innovations
4.2. Diffusion of low-energy innovations
4.3. Impact of low-energy innovations

24. 4.1. Emergence of niche-innovations
Protected niches as ‘proto-markets’ that enable
1) Learning processes at multiple dimensions:
technical aspects and design specifications
market and user preferences
cultural and symbolic meaning
infrastructure and maintenance networks
industry and production networks
regulations and government policy
societal and environmental effects
2) Building of social networks/constituency behind innovation (which also facilitated ‘broad learning’)
3) Articulation of visions that provide orientation for learning, attract attention/funding and create enthusiasm/interest.

25. Experiments, demonstration projects as concrete carriers
Radical innovations emerge through sequence of projects:
a) up-scaling: more and larger projects, linking to wider processes
b) deepening: articulation of rules/best practices by aggregating lessons and circulating ideas and people between projects c) broadening: include more actors, expand application domains

26. 4.2. Diffusion
Diffusion of low-energy innovation is difficult because of
1) Individual barriers to adoption:
- Split incentives
- Perceived high upfront costs
- Lack of access to capital
- Lack of (technical) skills
- Lack of (reliable) information
- Limited interest in energy issues (motivation)
- Resistance to change (habits, routines, hassle-factor)
- Disappointing results (cost savings)

27. 2) Mis-match with existing regime/contexts:
Weakening policies
Decreasing political priorities (‘green crap’)
Absence of reliable suppliers
Decreasing public discourse and sense of urgency
User routines and attachment
to cars and individual boilers
Policy dilemma
Diffusion is harder for more radical
Innovations that may hold greater
long-term potential

28. We aim to investigate multi-dimensional interactions between green niche-innovations and existing regimes
1) Technical dimensions: cost/performance improvements, investments, learning curves, infrastructure
2) Business: new entrants/incumbents, supply chain, skills
3) Policy/politics: political debates, policy learning, policy mix
4) Cultural debates and meanings
5) Dynamics of user practices: learning, preferences

29. 4.3. Impact
System innovation/transitions can have major influences on demand and consumer practices [many historical examples)
Impacts of low-energy innovations are hard to predict because:
1) People adapt behaviour, preferences, norms
2) Knock-on effects in wider systems (replacing one component may trigger further change)
Rebound effects particularly worrisome

30. System impacts and rebound effects
New lighting applications (more places lit to higher levels for longer)
Changed standards, norms, practices
Lower
lighting bills
Holiday in Spain
More energy
Less energy
More energy
Lower
lighting
costs
Use more illumination for longer

31. 5. Conclusion Energy efficiency revolution needed (and possible)
Socio-technical approach complements techno-economic approach
Asks different (more processual) questions rather than ‘barriers to adoption’ or ABC (attitude, behaviour, choice)
Part of wider (exiting) debate on sustainability transitions, where new scholars can make relevant contributions!

33. Policy strategy for transitions
Two-pronged policy strategy:
1) Niche-level: Stimulate variety/innovation
- Long-term visions + short-term action (projects)
Technical + social/behavioural change (system innovation)
Incumbents + outsiders
2) Regime-level: Tighten selection environment
(taxes, regulations, incentives)

34. Variety of policy instruments (policy mix)
Command-and-control (top-down steering)
Market model (incentivize bottom up agents)
Policy networks (convening, orchestrating processes)
Governance instruments
Formal rules, regulations, laws
Financial incentives (subsidies, taxes)
Learning processes, projects/experiments, vision/scenario workshops, strategic conferences, public debates, platforms
Foundation scientific disciplines
Classic political science
Neo-classical economics
Sociology, innovation studies, neo-institutional political science