Changing practices of power system resilience
Authors: Sarah Mander, Dana Abi Ghanem, Clair Gough
Abstract: The relationship between consumers and electricity network operators is changing, as operators move beyond primarily supply side measures to maintain network resilience and seek to incorporate end users through measures including demand side management. Using data from a series of focus groups, which explore social responses to approaches to manage the resilience of the electricity network, we consider how these changes impact on the ability of consumers to engage in everyday practices and the implications for energy system governance. This work suggests that whilst the resilience of the network can be managed through demand side measures, these can challenge the ability of households or businesses to maintain their everyday functions highlighting how, when considering resilience, different actors, such as consumers, network operators and regulators, have differing views of what is a desired end-point.
On Dynamic Capabilities and Environmental Innovations
Authors: Effie Kesidou, Pelin Demirel
Abstract: The literature on dynamic capabilities looks at how organizational routines generate dynamic capabilities within the organization and explores whether dynamic capabilities explain differences in performance between firms. Yet, few studies systematically examine the role of dynamic capabilities in driving environmental innovations. Environmental innovations have risen in the strategic agendas of companies due to growing pressures by external stakeholders for a reduction of the environmental impact. In the face of these shifts in the business environment, firms strive to renew their dynamic capabilities in order to meet the increasing need for environmental innovations.This paper makes a theoretical synthesis of the innovation, environmental economics and strategic management literatures and collects new survey data from UK firms. Probit regression analysis shows that technological search, market search, and learning capabilities are important in motivating different types of environmental innovations. These results provide evidence in support of the importance of dynamic capabilities for environmental innovations.
Emergence of District Heating Networks; modelling alternative business models
Authors: Jonathan Busch, Katy Roelich, Catherine Bale, Christof Knoeri, Ruth Bush
Abstract: Infrastructure business models that promise resource efficiencies and additional social benefits exist at sub-national scales, but only as isolated examples of good practice. We present an agent-based model for analysing the potential for different actors to implement local infrastructure business models, based on agents’ ability to overcome barriers in the development process. This presents a novel approach insofar as previous models have concentrated on the acceptance of alternative value provision models or the evaluation of district heat networks’ potential, rather than the emergence of alternative business models. We implement the model for district heating networks in the UK, which have the potential to significantly contribute to carbon emission reductions, but remain under-developed compared with other European countries. We discuss the relation between different possible policy interventions and the actors, scales and typology of district heating schemes they enable – with implications for realising different levels of social and economic value.
Reframing Energy Demand: Innovation for Sustainable Heat in Northern European Cities
Authors: Ronan Bolton, Dave Hawkey, Janette Webb, Mark Winskel
Abstract: Based on a new research project called Reframing Energy Demand – innovation for sustainable heat, this paper sets out the rationale for a comparative interdisciplinary social science analysis of heat decarbonisation in Northern European cities, and outlines an analytical framing based on socio-technical systems thinking for the analysis of sustainable heat pathways. The project aims to compare the institutional, business and organisation structures implicated in heat supply chains and energy efficiency in the urban environments of Denmark, Germany and UK. In the paper we outline a socio-technical approach, drawing on science, technology and innovation studies and economic sociology, to investigate the relative capacity of cities for transformation to low energy, low carbon and sustainable systems. We discuss how our approach might inform key challenges such as the financing of low carbon heat supply and energy efficiency investments, and the scope for knowledge transfer between cities.
What motivates members of renewable energy cooperatives? An econometric analysis
Authors: Thomas Bauwens
Abstract: The objective of this paper is to empirically investigate the motivations that drive individuals to engage in renewable energy cooperatives, which enable consumers themselves to co-own and invest in renewable energy generation units. The purchase of cooperative shares is conceptualized as contributions to impure public goods and a distinction is made between extrinsic and intrinsic motivations. Using data from an original survey conducted in two cooperatives located in Flanders, Northern part of Belgium, and a control group, we study the determinants of two decisions: the propensity to join the cooperatives and the level of contributions, i.e. the number of shares purchased. The results show that the different monetary incentives do not play the same role for both cooperatives. In addition, intrinsic motivations are indeed essential drivers, but they are not necessarily the same for the two decisions studied.
Financing energy efficient retrofit schemes: the contribution of new business models based on revolving funds
Authors: Niall Kerr
Abstract: The Energy Efficient Retrofit (EER) of buildings is considered important for a variety of environmental and social reasons. Lowering carbon emissions, ensuring energy is affordable and enhancing the security of energy provision. Despite multiple studies that consider the possible options significant lethargy still exists regarding levels of EER activity. The UK presents an acute case study for EER implementation. It has one of oldest building stocks in Europe and one of the most energy inefficient. Major EER schemes that have taken place have demonstrated the considerable benefits, but government policy designed to encourage EER uptake, has been criticised for cherry picking those with lowest payback. This paper evaluates the use of a revolving fund (RF) for EER. The fund captures savings from some measures to help finance other measures. Using evaluated costs and savings of EER, alongside a RF model, the potential for recycled investment is examined.
Investing in low carbon transitions: Energy finance as an Adaptive Market
Authors: Stephen Hall, Tim Foxon, Ronan Bolton
Abstract: The volume of capital required to transition energy systems to low carbon futures is very large, yet evolutionary and institutional economics has under theorised the role of capital markets in financing socio-technical transitions. This has been due to a lack of suitable theory to supplant neo-classical notions of capital markets and innovation finance at the transformative stage of systems change. This research draws Grubb et al’s (2014) notion that planetary economics is defined by three ‘domains’, which describe behavioural, neoclassical and evolutionary contributions to sustainable development theory. The authors identify first and second domain theories of financial markets that are well established, but argue third domain approaches have lacked a compatible theory of capital markets. Based on an analysis of renewable energy finance in the UK, the Adaptive Markets Hypothesis is presented as an approach compatible with ‘third domain’ understandings of system transformation.
Non-growing enterprises – analysis and evidence
Authors: Irmi Seidl
Abstract: Growing enterprises are at the heart of the growth society and their growth drivers are both internal and external. However, not all enterprises grow, in particular many SME are in a steady state. There are various arguments why an enterprise may not pursue growth; it may be limited markets, economic arguments or values. Increasingly, studies are being carried out about non-growing enterprises, and some start to accept a coming-out. Hence, we get insights in their strategies such as niche construction, use of efficiency potentials, quality leadership, improvement of customer ties etc. Also non-growing enterprises may grow temporarily: for instance as start-up or due to new investments, but they differ from others by considering growth as an inferior objective.
Business innovation for consumer adoption of lower carbon practices: an empirical analysis using a coevolutionary framework
Authors: Elizabeth Morgan, Tim Foxon, Anne Tallontire
Abstract: Coevolutionary frameworks have been proposed for analysing transitions to a low carbon economy, but empirical analyses for consumer goods are few. This research studies laundry detergents in Europe, which generate the majority of their lifecycle carbon emissions in the consumer use phase. It uses a coevolutionary framework and examines mutually influencing systems of business strategies, consumer practices, technologies and institutions. The analysis was undertaken through examining the 18-year history of initiatives from the European detergent manufacturer’s association and its individual company members. The findings suggest that coevolution can be identified between business strategies, institutions and technologies, and there is path dependency and ‘lock-in’ in these systems. These are barriers to substantive carbon emission savings. The research concludes that different styles of intervention will be required to yield substantial carbon emissions savings. It demonstrates that a coevolutionary framework can be applied to consumer-facing industries and associated technologies.
A critical inquiry into new legal business frameworks for social enterprises and their ability to generate institutional change
Authors: Ellen Stenslie
Abstract: The purpose of this article is to analyse how environmental and social entrepreneurs adopt new, legal business models, different from those used by traditional business and non-profit organisations. These legal institutions vary widely in their structure, but they all promote the dual pursuit of profit and social purpose. Based on a literature review, an analysis of legal frameworks and empirical data from the United Kingdom and the United States of America, this study identifies multiple challenging aspects of such models. Examples include weak enforcement mechanisms, high risk of goal conflicts, insufficient safeguards and a lack of accountability towards wider society and stakeholders. Early results indicate that a) the legal models represent inadequate institutional transformation if we are to achieve truly sustainable business models, and b) environmental and social entrepreneurs struggle to find a legal model that suits their needs and represents a real difference from business as usual.
Beyond Growth, Beyond Profit? - Possibility and desirability of profit-making in a steady-state economy
Authors: Gabriel Trettel Silva, Dan O’Neill
Abstract: We question to what extent the pursuit of profit, as a fundamental element and the final goal of economic activity in capitalist societies, is compatible with the principles of a steady-state economy (SSE). We discuss both the possibility and desirability of “steady-state capitalism” and suggest that the profit motive creates two broad types of problems for a SSE: (1) the accumulation of wealth (and consequent inequality and power imbalances) and (2) the prioritisation of financial returns over socio-environmental needs.
We suggest that the first group of problems may be tackled through redistribution polices (progressive taxes) and economic democratisation (cooperatives). The second poses greater challenges, but social enterprises offer a potential structure to allow firms to prioritise socio-environmental goals over financial profit. While modern shareholder-owned corporations have been described as (negative) “externalising machines”, social enterprises could represent “positive-externalising machines” and a path to redefine the pursuit of profit in a SSE.
Challenging the Status Quo: How Growth-neutral Businesses Survive in a Growth-driven Economy
Authors: Heidi Leonhardt, Maria Juschten
Abstract: As in recent years it has become apparent that the current economic system is conflicting with biophysical and social limits, perpetual economic growth is called into question. Several propositions for alternative pathways have been brought forward, one of them being degrowth. Common to all alternatives is the need for actors such as businesses to put them into practice. Several types of such growth-neutral businesses exist, but have not been studied in detail yet. Our research questions are therefore as follows: Which are the drivers of growth for medium-sized companies? Which characteristics do growth-neutral firms have that allow them to escape these drivers?
First, drivers of growth for individual firms are identified through a systematic literature review. Second, several growth-neutral businesses are studied using a mixed method approach, consisting of semi-structured interviews and questionnaires. The goal is to get an insight into structures and conditions required to support self-sustaining, growth-neutral companies.