Scripting Transitions

A framework to analyze structural changes in socio-technical systems

Anish Patil

Delft University of Technology

A framework to analyze structural changes in socio-technical systems

Proefschrift

ter verkrijging van de graad van doctor aan de Technische Universiteit Delft, op gezag van de Rector Magnificus prof. ir. K.C.A.M. Luyben, voorzitter van het College voor Promoties, in het openbaar te verdedigen op 6 juni 2014 om 15:00 uur door

PATIL Anish Chandrakant

Master of Engineering, Vanderbilt University, USA geboren te India.

Dit proefschrift is goedgekeurd door de promotor(en): Prof dr. ir. P.M. Herder Prof dr. ir. M.P.C. Weijnen

Copromotor: Dr. P.W.G. Bots

Samenstelling promotiecommissie:

Rector Magnificus, voorzitter Prof. dr. ir. P.M. Herder, Technische Universiteit Delft, promotor Prof. dr. ir. M.P.C. Weijnen, Technische Universiteit Delft, promotor Dr. P.W.G. Bots, Technische Universiteit Delft, copromotor Prof. Dr. rer. nat. C. Binder, University of Munich Prof. Dr. K. Brown, Curtin University Prof. dr. C.P van Beers, Technische Universiteit Delft Prof. dr. R.W. Kunneke, Technische Universiteit Delft Prof. dr. ir. W.A.H. Thissen, Technische Universiteit Delft, reservelid

ISBN 978-90-79787-59-3

This research was funded by the Next Generations Infrastructures Foundation.

This thesis is number 70 in the NGInfra PhD Thesis Series on Infrastructures. An overview of titles in this series is included at the end of this book.

Publisher: Next Generations Infrastructures Foundation P.O.Box 5015, 2600 GA Delft, the Netherlands www.nginfra.nl

Keywords: TranScript, transitions, sustainable energy system, socio-technical systems

Cover image: Andreas Ligtvoet and Anish Patil

Printed in the Netherlands by Gildeprint Drukkerijen, Enschede

To my wife, Zsofia

Preface and Acknowledgements

Given the amount of time I have spent on this thesis, it would not be an exaggeration to call it a transition. During this transition, many changes have taken place in my life – I got married, with two beautiful daughters, an interesting job, and travelled to more than 50 different countries. This transition took time, but I thoroughly enjoyed it. Best parts of this transition were these ‘detours’. It is like going on a vacation where everything is planned out but one day you make a wrong turn or take a detour, and end up somewhere completely new and different, doing something you never thought you’d do. Maybe you feel a little nervous while it's happening. However, looking back, you realize it was the best part of the whole trip. Looking back on my PhD phase, this is how I feel today. These detours made this phase memorable for me. Maybe I am just romanticizing this a tad, as memories are short-lived, and I may have forgotten some tough moments during this time. My wife used to tease me, saying that I will retire doing a PhD, but for once I proved her wrong. Married men will identify with me on this one.

Whatever it is, at this moment while writing this final piece related to my thesis, I feel happy the way this transition has panned out for me. Of course there were a few ups and downs, but given a chance to do it again I may not do anything drastically different. I have seen many PhD’s talk about life after PhD, but surely I had a life before and during my PhD, and things won’t be terribly different even after. During this transition, I met many nice people, and I would like to take this opportunity to thank all these people who have helped me successfully reach my intended destination.

First of all, I would like to thank my promotors Paulien Herder and Margot Weijnen. Margot, thanks for giving me the opportunity to pursue a PhD at Delft. I still remember our brief phone conversation when you hired me as a PhD researcher and everything was arranged quickly after for me to start my work here. You watched this transition from a distance and always gave me confidence that I would finish it successfully. Paulien, thanks for always being there for me during this transition. You have seen me go through many highs and lows during this phase, but you always trusted me (or if you may have not, you never showed it). This trust gave me the strength to finish this thesis.

Many thanks also go to my co-promotor, Pieter Bots. However, knowing Pieter, I should keep this acknowledgement short, crisp and clear; anything else and it will be superfluous. Pieter, thanks for helping me with the scientific rigor, especially in ‘structuring’ my thoughts so I could bring this PhD ‘process’ to a successful end. Without your help this thesis would not have been completed.

I would also like to thank Kas Hemmes and the late Barry Lichter for bringing me in contact with Margot, and helping me in getting this PhD position. Thanks also to Hans Vrijenhoef, for reducing my contract at Proton last year, so I could concentrate on getting this thesis done. Furthermore, I would like to acknowledge the Greening of Gas project and the Next Generations Infrastructure program for sponsoring my research.

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Special thanks go to Rob Stikkelman. He is truly the bridge between industry and academics at the E&I section. During my PhD phase he brought me in touch with Proton Ventures, where I have been working for the past four years. And later while working at Proton, we teamed up to work on a TUDelft/NGI project. Over these years I have seen him help many PhD’s, of course in his own special way. It’s been great working with him.

I appreciate the help the E&I secretariat has provided me over these years, especially Eveline, Prisca, Connie, Angelique and Rachel. I would further like to thank my peer group at TBM - Buyung, Geertje, Igor and Telli for their constructive feedback over the years.

During this phase I have travelled to many different countries. Some of these trips were for academic conferences with other E&I section members, with many great and interesting moments. Special mention to the family portraits (with a self-timer of course) in Taiwan and New Zealand with Laurens and Hamilcar; Samba dancing in Rio with them and Catherine; missing our flight in Berlin on our way back with Austin and having to take an overnight train in freezing cold; the ‘brave teacher’ – Laurens, sticking his head out of the toy train while coming down from the Alishan mountains; crashing a Rotary club party in Taipei with Hamilcar and actually receiving a big china set as a gift! Given its international mix, section E&I was always fun to be a part of, especially because of the ‘axis’ – Leslie, Monica and Austin, who were not just colleagues but over time became great friends, too. I am glad that Leslie and Austin have agreed to be my paranymphs for the defense.

Special thanks to my neighbors – Jan, Marianne, Jo and Kees. They have always treated me like family, and made me feel welcome in their homes. This special bond with my neighbors and my ex- roommates from Zusterlaan – George, Pawel and Pantelis, made Delft ‘home away from home’ for all these years. I would also like to thank our friends in Delft – Rakhi, Zeeshan, Elis, Koen, André and Fanni for many interesting social gatherings and good times.

Over these years my squash and tennis group have become really good friends to me, especially Robbert, Jeroen, Andreas, Ben and Luca. Ben, I have always enjoyed our squash games, our yearly 40 km ‘Midvastenlopen’ and sauna discussions. You have always inspired me with your open- mindedness and positive outlook. Andreas and Luca, we were in the same boat for a long time, and I truly appreciate our discussions about the thesis, travels, sports and other good and better things in life. Andeas, thanks for your help with the cover design for this book and the Dutch translations. This group has just not helped me in my personal life, but also played a large role in my academic life. There have been moments when I was 0-8 down in squash and I have come back to win the game, similarly in tennis too. It was not just about winning the game, but much more than that. I told myself, if I can still win a game from being 0-8 down then I can certainly finish my PhD thesis one day too. Especially, I remember the Midvastenlopen four years ago. I was walking with Ben, Andreas and Zsofi. Around 18 km mark one of my knees completely gave up on me. I could have easily given up at that point, but I told myself if I give up on the remaining 22 kms, one day I might just easily give up on my thesis as well. At that point, I made up my mind that I am going to finish the race and also my thesis one day. I completed the remaining 22 kms with the help of a stick and physical and

P a g e | viii emotional support from Zsofi. I have completed Midvastenlopen many times over the last ten years, but this was the most satisfying of all, as I knew at that point that I will one day complete my thesis!

I am indebted to my parents for all their love and support. My father, with his around the world travels and my mother, with her desire to try new things have always been an inspiration to me. I would also like to mention my late uncle Ramesh Patil. I owe a lot of ‘firsts’ in my life to him. As a kid I still remember the day he got me my first watch and a belt – my first train ride, amusement park trip, and even my moped was because of him. He played a major role during the formatting period of my life. Special thanks go to my brothers – Mahesh, without his guidance I would still be a wimpy guy who would have quit things even before they got tough and Ashish, who has been a great traveling companion and a friend all these years. Ashish, I have always enjoyed our trips and discussions, and sometimes it is a bit unsettling to see how alike we are, in the way we look, think and act.

My wife, Zsofia, deserves a special acknowledgement – I dedicate this book to her. I know for sure, without Zsofi’s support I would not have been able to complete that Midvastenlopen four years ago and also not this PhD thesis. She has always been by my side during this transition, and supported me whenever I needed her. She ensured that that the ‘home department’ was running like a well-oiled machine and I could just focus on my work. This stability in one important aspect of my life, gave me the courage and stamina to complete this thesis. Now that this thesis is completed, I am looking forward to spending more time with her and our beautiful daughters – Johannah and Annabel.

Cheers to a successful transition!

Anish Patil – April 2014.

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TABLE OF CONTENTS

PREFACE AND ACKNOWLEDGEMENTS ………………………………...………………………………… vii

CHAPTER 1: INTRODUCTION ...... 1

INTRODUCTION ...... 1 SUSTAINABLE DEVELOPMENT ...... 2 ENERGY INFRASTRUCTURE SYSTEM ...... 3 TRANSITION TOWARDS SUSTAINABLE ENERGY SYSTEM ...... 4 LITERATURE GAP ...... 6 RESEARCH QUESTION ...... 6 RESEARCH APPROACH ...... 7

CHAPTER 2: TRANSITIONS IN SOCIO-TECHNICAL SYSTEMS ...... 11

TRANSITION ...... 11 MULTI -STAGE DYNAMICS ...... 12 MULTI -LEVEL DYNAMICS ...... 13 SOCIO – TECHNICAL SYSTEMS ...... 15 DELINEATING RULES ...... 17 STRUCTURE – ACTOR DUALITY ...... 19 STRUCTURE AND PROCESS ...... 21 DISCUSSION ...... 23

CHAPTER 3: ANALYTICAL FRAMEWORK - TRANSCRIPT ...... 25

CONCEPTUALIZING TRANSITIONS ...... 30 RESEARCH METHODOLOGY ...... 32 TESTING OUR FRAMEWORK ...... 37

CHAPTER 4: GREENING OF GAS CASE STUDY ...... 39

NECESSARY CONDITION 1: NEED FOR EXCESS HYDROGEN CAPACITY ...... 42 NECESSARY CONDITION 2: NEED TO BE ABLE TO FEED HYDROGEN INTO THE NATURAL GAS NETWORK AND TO HAVE END - USER APPLIANCES THAT ARE COMPATIBLE WITH THE HYDROGEN AND NATURAL GAS MIXTURE ...... 56 RESULTS ...... 70 AND/OR DIAGRAMS PRESENTING ALL THE ASSETS ...... 71 SYSTEM CONFIGURATION ALONG WITH THE RELEVANT STRUCTURES ...... 73 DISCUSSION ...... 76

CHAPTER 5: HYDROGEN FOR PUBLIC TRANSPORT CASE STUDY ...... 81

NECESSARY CONDITION 1: NEED FOR EXCESS HYDROGEN CAPACITY ...... 83

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NECESSARY CONDITION 2: NEED TO HAVE EASY ACCESSIBILITY OF HYDROGEN FOR REFUELING THE PUBLIC TRANSPORT BUSES ...... 90 NECESSARY CONDITION 3: NEED TO HAVE HYDROGEN READY BUSES ...... 92 RESULTS ...... 101 AND/OR DIAGRAMS PRESENTING ALL THE ASSETS ...... 101 SYSTEM CONFIGURATION ALONG WITH RELEVANT STRUCTURES ...... 103 DISCUSSION ...... 105

CHAPTER 6: DISTRICT HEATING SYSTEM CASE STUDY ...... 107

NECESSARY CONDITION 1: NEED TO BE ABLE TO CAPTURE WASTE HEAT ...... 109 NECESSARY CONDITION 2: NEED TO BE ABLE TO TRANSPORT AND USE WASTE HEAT FOR DISTRICT HEATING ...... 115 RESULTS ...... 120 AND/OR DIAGRAMS PRESENTING ALL THE ASSETS ...... 121 SYSTEM CONFIGURATION ALONG WITH RELEVANT STRUCTURES ...... 122 DISCUSSION ...... 124

CHAPTER 7: DISCUSSION AND CONCLUSIONS ...... 125

DISCUSSION ...... 125 CONTRIBUTION TO THE TRANSITION MANAGEMENT BODY OF LITERATURE ...... 126 ADDED VALUE OF THE TRAN SCRIPT FRAMEWORK ...... 132 CONTRIBUTION TO THE SYSTEM DYNAMICS BODY OF LITERATURE ...... 135 CONTRIBUTION TO THE TECHNOLOGY INNOVATION SYSTEMS BODY OF LITERATURE ...... 137 CONCLUSIONS ...... 140 VALIDATING OUR ANALYTICAL FRAMEWORK ...... 141 REFLECTION ON THE RESEARCH PROCESS ...... 144 FUTURE OUTLOOK FOR OUR FRAMEWORK ...... 146

CHAPTER 8: REFLECTION...... 151

BIBLIOGRAPHY ...... 157

INDEX ...... 181

SUMMARY ...... 183

SAMENVATTING ...... 193

ABOUT THE AUTHOR ...... 203

LIST OF PUBLICATIONS ...... 204

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Chapter 1: Introduction

Introduction

Energy plays a crucial role in the sustainable development of society – clean, affordable, and continuous supply of energy is the engine for future growth (UNESCAP 2006). Energy is fundamental to the quality of our life. From the alarm that wakes us up in the morning, the coffee- machine that makes coffee to keep us alert, the automobile that drives us to work, to the kitchen stove that cooks our food – energy is part of our life. The constant dependence on fossil fuels to energize our life presents a new dilemma – how to satisfy this constantly growing demand for energy given the fact that the fossil fuel resources are finite? The challenge is not just satisfying the increasing energy demand, but at the same time doing it in an environmentally friendly way.

Much of the global-scale environmental degradation we see today is due to the adverse effects of energy production and usage (EIA 2008, Watson 2008). When coal, gas and oil are burnt, they release carbon dioxide (CO 2), which is a contributor to the greenhouse effect by trapping heat in the atmosphere and causing global warming (Kaygusuz 2009). Economies of countries, and particularly of the developed countries, are dependent on secure supplies of energy. As large developing economies, such as India and China develop further, the demand for energy will significantly increase in the near future, thus putting strain on the global balance between energy supply and demand. The World Energy Council (2007) predicts that by the year 2050, the world-wide energy demand will at least double compared to its present level, and that if the energy supply does not match the demand, energy prices will rise drastically (WEC 2007). It is a given fact that fossil fuel resources are finite – hence, constantly increasing energy demands are unsustainable (Tsoskounoglou, Ayerides et al. 2008). A majority of the global oil and gas resources are concentrated in the Middle-East, and keeping in mind that this area is for the most part subject to constant international political tension, it is not surprising that direct dependence on fossil fuels constitutes a risk factor for the political and economic stability of the whole world (Clingendael 2004).

Currently fossil fuels cater to about 80% of the world’s primary energy demand, and the remainder of 20% demand is catered by alternative energy resources such as nuclear and renewables (IEA 2010). Renewables refers to form of energy which is an alternative to the traditional fossil fuels and nuclear (EPAct 2005). Although renewables currently play a very minor role in satisfying the primary energy demand, they can be expected to play a larger role in an energy system of the future given their potential, as clean and safe energy resources. Benefits include diversification of energy supply, enhanced regional and rural development opportunities, creation of a domestic industry and employment opportunities (del Río and Burguillo 2009). As most of the renewables are distributed more evenly over the globe than world oil resources for example, the exploitation of these resources may also increase the security of supply (Junginger 2005). There is such a diversity of choices that the exploitation of renewables if carried out in the context of

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Chapter 1: Introduction sustainable development could provide a far cleaner energy system while at the same time conserving scarce fossil fuel resources. The current energy system based on fossil fuels is not sustainable for the future, and the main task facing mankind will be to manage the transition process towards a sustainable energy system.

Sustainable development

Sustainable development implies meeting the needs of the present without compromising the ability of future generations to meet their own needs (UN 1987). In seeking sustainable development, it becomes apparent that concern for the environment is part of a wider concern aimed at well-being and improved global living standards. Sustainable development of a society demands a sustainable supply of energy resources – that in the long term, is readily available at an affordable cost and can be utilized for all required tasks without causing negative societal and environmental impacts (Dincer 2000, MINVROM 2001).

Based on the above definition, the current global trend in energy supply and consumption is not sustainable, and it is responsible for the lion’s share of greenhouse gas emissions. The established fossil energy sources are finite and at the rate at which they are being depleted they will not sustain future generations (Ohta and Veziroglu 2002, IEA 2010). Politicians worldwide have agreed on ambitious CO 2 emission reduction targets. The most notable of such international agreements are the Rio Conference (Earth Summit) and the Kyoto Protocol to the United Nations Framework Convention on Climate Change that strengthens the international response to climate change (UNFCCC 1997). At the Earth Summit in 1992, more than 150 governments, including the major industrial and developing countries, agreed on a framework convention on climate change. The main idea of the convention was to establish a framework for dealing with climate change policies (Lund 2006). During the 1990s it soon became clear that this Rio convention in itself would not change developments towards growing emissions of greenhouse gases. In 1997 the convention was therefore expanded to include the so-called Kyoto Protocol, which for the first time sets binding targets for industrialized countries to reduce emissions by 2020. By arresting and reversing the upward trend in greenhouse gas emissions that started in these countries 150 years ago, the Kyoto Protocol promises to move the international community one step closer to achieving the Convention’s ultimate objective of preventing "dangerous anthropogenic (man-made) interference with the climate system" (UNFCCC 1997). The European Union (EU) and its Member States ratified the Kyoto Protocol in late May 2002 (EC 2002). In line with this agreement many international, national and city governments have formulated strategies to meet the Kyoto objectives. The EU target is 20% reduction of emissions by 2020, when compared to 1990 (EC 2002). In line with the EU targets, the Netherlands have agreed for 14% reduction of emissions in 2020 when compared to 1990 levels (EZ 2011). The Protocol suggests various means of attaining the objectives of lowering emissions, for example improving the energy efficiency, promotion of sustainable forms of agriculture, development of renewable energy sources, etc (EC 2002). So on the one hand the protocol aims at reducing harmful emissions and on the other hand at improving the security of supply due to improvements in energy efficiency and enhanced diffusion of renewables.

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Chapter 1: Introduction

Energy Infrastructure System

Energy infrastructures are responsible for the delivery of most of energy. Infrastructures are defined as basic social and technical structures needed for the operation of a society (Oxford 2013). They provide essential services such as transport (of people and goods), water, energy, waste- removal, and communication services (Herder and Verwater-Lukszo 2006, Weijnen and Bouwmans 2006). Here (im)movable technical structures deliver essential public or private services through the storage, conversion and/or transportation of certain commodities (Herder, Turk et al. 2000).

As infrastructures encompass both social and technical structures, they form a so-called socio- technical system (STS) (Hughes 1987, Weijnen and Bosgra 1998, Ottens, Franssen et al. 2006, Herder, Bouwmans et al. 2008). The concept of infrastructures as STS was introduced by Thomas Hughes in his analysis of the development of the electricity infrastructure (Hughes 1987), wherein he asserts that infrastructures should be treated as STS – here social structures include institutions such as regulations, norms, heuristics, etc; and the technical structures include assets such as machinery, pipes, buildings etc (Peter Kroes 2006, Fleetwood 2008). These structures facilitate processes such as production of energy, flow of energy, regulation of the system, etc within an energy infrastructure. The existing energy infrastructure has evolved over time, resulting into a complex socio-technical system built up around the energy supply chain (Larsen and Petersen 2005). Once the investment in assets is made, the economic return period is often very long (decades to centuries), and the major decisions on new infrastructure are likely to bind actors to this structure for a long time (Nielsen and Elle 2000, Watson, Scrase et al. 2010). Hence, energy infrastructures are characterized by path dependency, thus implying that the decisions taken in the past limit the options available today and in the future (Foxon, Pearson et al. 2013).

STS acquire momentum as they grow (Hughes 1987). Momentum can be defined as a mass of technical and institutional structures [that tend] to maintain their steady growth and direction. This implies that once the technical and institutional structures have emerged, the system tends to continue along that same path of growth. The momentum of the system thus pulls it forward along what appears to be a predetermined pathway; this phenomenon is called path dependency that leads to lock-in (Nelson and Winter 1977, Kaijser 2004).

Path dependency implies that the technical choices available today are often dictated by historical developments (David 1985, Page 2006). Path dependency makes it difficult to deviate from paths that are rooted within existing systems. Positive feedback mechanisms like bandwagon and network effects are at the origin of path-dependence (Kelly 1998, Dobusch and Schüßler 2012). Bandwagon effect explains the tendency that as a greater number of actors adopt a technology, the more other potential adopters will adopt it (Farrell and Saloner 1986, Lee, Smith et al. 2003). Initial adoption serves as evidence that the early adopters must have superior information about the technology (Davies 1979, Banerjee 1992). Bandwagons create a self-reinforcing cycle because the bigger the bandwagon gets, the larger the number of actors involved in the bandwagon (Abrahamson and Rosenkopf 1993). Positive network effects lead to economies of scale when the higher number of technology users allow for a more efficient production and distribution of the

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Chapter 1: Introduction technology. These savings may be forwarded to the consumers – via lower prices – which increases the attractiveness of the technology even further (Sydow, Schreyögg et al. 2005). The more a technology is used by other users, the larger the availability and usefulness of that technology and the variety of supporting physical, social and institutional structures (such as technologies, people, relationships, standards, etc.) that become available and are adapted to that particular technology. Development of supporting structures leads to the formation of a path around the selected technology that locks-in and persists against change (Arthur 1989, Page 2006). For example – as technology matures overtime, more and more people start using the technology, this leads to formation of standards or regulations, this further fuels the production and usage of this particular technology.

Furthermore, energy infrastructure requires large upfront investments, where the high set-up costs are clear barriers to entry for new actors, or barriers for actors within the system to change (Arthur 1996, Watson, Scrase et al. 2010). As there may be sunk costs in the existing assets, shifting to a new technological path would destroy these sunk costs; hence actors tend to stick to established technologies as long as possible, thus eventually leading to a “lock-in” (David 1985, Geels 2004).

Transition towards sustainable energy system

Changing the energy infrastructure system towards sustainability implies a transition (Bergh and Oosterhuis 2005, Verbong and Geels 2007). Our working definition for transition is that a transition is a process through which one or more new significantly different structures are established. Transition is not caused by change in a single factor – such as introducing a new technology, but is the result of multiple processes over time between the various structures of an STS leading to the emergence of a new structure (Kemp, Schot et al. 1998, Rotmans and Loorbach 2009). Over time innovation processes bring about changes to an existing structure or establishment of a new structure; while at the same time this new structure and other existing structures facilitate these processes. This shows the duality of structures and processes which both define, influence and constrain each other (Bots and Daalen 2012).

During the transition towards a sustainable energy system renewables are expected to play a larger role, but there are still quite a few barriers to be overcome (Elliott 2000, Foxon and Pearson 2007). One of the main problems with renewables is intermittency – that can be the difference between day and night, or seasonal, summer and winter. How do we capture solar power and store it for a rainy day, literally. On the other hand fluctuations in wind power would lead to grid imbalances if not properly controlled. Although solar and wind power (most-feasible renewables currently) are more or less proven technologies, the supporting infrastructure that would overcome the intermittency of these resources to provide uninterrupted energy is still largely unproven, hence they are still costly or not that widely available (Foxon, Gross et al. 2005). This problem is faced by any new technology – wherein the production of applications awaits complementary infrastructure, and infrastructure investments await applications. It’s a classic chicken and egg

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Chapter 1: Introduction problem, where investors hesitate in investing in such emerging technologies (McKay 1992, Meijer, Hekkert et al. 2007).

Competing head-on with the incumbent energy system based on fossil fuels is exceptionally difficult. A century of investment and innovation has yielded a comprehensive network of production, distribution and usage of energy carriers that powers our homes, cars and factories more conveniently, efficiently and cost-effectively than any other option available at this point. But as observed around us, we see that changes do happen and new technologies do manage to overcome the chicken and egg problem. Opportunities lie in niches. A niche is a protected environment that allows developing the initial bandwagon effect, during which early adopters test the technology and it can be introduced to a larger audience for further diffusion (Raven 2005, Caniels and Romijn 2008). Renewables can become successful if they get the opportunity to develop and improve in a niche. The initial bandwagon effect allows new technologies to overcome the reinforcing mechanisms of path dependence and lock-in (Schot and Geels 2008).

Transition towards a sustainable energy infrastructure is characterized as being a complex multi-actor problem (Loorbach, Brugge et al. 2008, Patil, Ajah et al. 2009). The complexity exists due to the interactions between the various structures within an STS (Weijnen, Herder et al. 2008). An STS is more than just an aggregation of its technical and institutional structures. Typically, as large sets of structures are working together to facilitate processes, synergies emerge. For instance, wind mills are installed to produce electricity, but when combined with “power to ammonia” technology, this electricity can be stored in the form of ammonia. Ammonia could be further used as a fuel, fertilizer or an industrial feedstock (Patil 2012, Patil, Laumans et al. 2013). This example shows that the combination of two technologies, such as wind mills and power to ammonia, can create synergies that can potentially bridge different STS’s. System structures continually interact in unpredictable ways through the processes they facilitate, and if one structure is added, altered or removed from the system, the other structures in the system will adapt the processes they facilitate accordingly (Holland 1992). Continuing our above example, if during wind-less periods wind electricity is not available, then natural Gas or biomass could be used to produce ammonia. Hence, if one structure such as wind mills do not perform other alternatives such as natural gas or biomass could be used to facilitate the ammonia producing process (Patil 2012).

The presence of multiple actors with different interests makes it difficult to shape the transition, as different actors attempt to steer changes into their own desired direction (Rotmans, Kemp et al. 2001, Patil, Ajah et al. 2009). It is not always clear where and how the change process should start and which actors should take the lead, if any (Loorbach, Brugge et al. 2008). We observe that the wide adoption of renewables has not yet taken place and that policy makers are in need of tools to nudge the system, to bring about the required changes. However there is even a greater problem as the policy makers do not know exactly which initial steps to take, let alone how to shape the system development trajectory in the direction of sustainability. To achieve sustainable development there is a need to translate global initiatives such as Kyoto targets into locally implementable policies, which can give impetus for the diffusion of renewables (Gupta and van Asselt 2006). Currently, there is difficulty operationalizing these global initiatives into implementable policies, this is proven

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Chapter 1: Introduction by the fact that many countries who have agreed to Kyoto targets are having difficulties meeting these greenhouse gas reduction goals (Torello 2013). For example: the proportion of energy from renewables in the Dutch energy mix is lagging behind the policy goals and it is highly unlikely that the Kyoto 2020 targets will be met (Nagappan 2008, Verdonk and Wetzels 2012).

Literature gap

We see a gap in the literature, especially a framework or tool that creates or produces a roadmap for transition. A study that maps out structural changes during transition in STS at intermediate stages is missing. We hypothesize that systematic analysis of the structures and processes within an STS will give us an insight into the transition process. If we could garner insight into this, we would know which actors control or are influenced by such structures, and which incentives or disincentives would mobilize such actors to nudge the transition towards a sustainable energy system. Such an actor-centered approach will help us in identifying policy levers by giving a clear idea to policy makers how to cater to the intrinsic drivers of different actors in order to nudge the transition of STS towards a desired end-state. Hence, the aim of this research is to create a framework that improves the understanding of transitions. Such insight is vital for policy analysts while devising policies in order to shape the development of the energy system in the direction of a sustainable energy system.

Research question

The problem as viewed in this research is that we do not know the exact steps to take in order to bring about the desired transition towards a sustainable energy system. We would, if we had a better understanding of transition phenomena within an STS. A better understanding of transition requires an analytical framework that will allow us to understand how transitions take place in STS, which is our research objective.

The research question we would like to address is:

What analytical framework will allow us to understand how transitions take place in an STS, especially how technical and institutional structures co-develop?

This framework helps us to understand transitions, if it can help us answer the following questions.

1. What are the potential transition paths towards a sustainable energy system? Here transition path is a sequence of structural changes during a transition. 2. Given a transition path, what are the structures that need to be established, which are the actors who would have an interest in developing these structures, and what are the drivers for these actors?

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Chapter 1: Introduction

Research approach

The main deliverable of this research is an analytical framework that will yield insights into transitions in socio-technical systems. We conceptualize transition as changes in structures, and socio-technical systems as systems where both the technical and social structures are relevant. For this research we have followed the deductive reasoning approach, where we have a hunch that thinking in terms of structures and process duality might help us in understanding transitions. We start with the Transition Management approach along with the structure and process duality to distil a framework, and further apply and test it on three different cases to see whether it works.

Since 2001, the Dutch government has adopted the so-called transition management approach as a basis for energy policy-making in the Netherlands (MINVROM 2001). We see shortcomings in using the Transition Management approach in garnering insight into the transitions in STS, especially in getting insights at the actor and structure level. We hypothesize that the Transition Management approach restricts itself to system level dynamics of the STS and does not reveal detailed structural changes happening during the transition process (Rogers, Neil et al. 2001, Rotmans, Kemp et al. 2001, Rotmans and Kemp 2003). Hence we look at the structuration theory that gives insight into the interplay between human action and social structures (Giddens 1984). Structuration theory is a proven framework to garner interplay between actors and social structures but it misses the handle for analysing technical structures (Orlikowski 2000). To balance the influence of technical and social structures on the development of the STS during the transition, we look at the philosophy of technical systems literature, to gain insights into the role played by technology during the transition in STS (Kroes and Meijers 2006, Peter Kroes 2006). This helps us in conceptualizing our analytical framework – that structures constrain and enable actors’ actions (processes), while at the same time processes produce, maintain and modify structures. We further develop a clear syntax to use our framework, and a method to apply our framework to different cases.

The research process we went about in achieving our research objective is presented in figure 1.1.

Step 1 for this research is about problem formulation. In this chapter we have established the need for an analytical framework that would impart insights into the transition process in socio- technical systems. Additionally, we present the research objective and question for this thesis. The aim of this step is to focus our research in a particular direction, and in this case it is transition in socio-technical systems.

Step 2 for this research is about problem justification, where in chapter 2 we discuss the state- of-the-art and analyze the dominant views to study transitions in socio-technical systems. The aim of this chapter is to identify the gaps in the literature and justify if a problem as specified in step 1 does indeed exist. Additionally, we discuss how our new proposed framework will fill these gaps and add value to the study of transitions in socio-technical systems.

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Chapter 1: Introduction

Step 3 of this research is about proposing a solution to fill in the gaps as identified by us in the field of transitions in socio-technical systems. In chapter 3 we will present our analytical framework with a methodology to apply this framework and interpret the results. The aim of this chapter is to provide a clear syntax and methodology to the analyst to apply our framework and provide a fairly unambiguous way of interpreting the results obtained.

Step 4 of this research is about testing our analytical framework along with the proposed methodology on three different cases. Chapter 4, 5 and 6 presents the analysis of three cases, along with a response to the research question posed above, and discuss whether our analytical framework allows us to garner insight into the transition process.

Step 5 of this research is about discussion and conclusion. In this chapter we discuss whether and how our framework adds value to the currently available methods to study transition. Furthermore, we will conclude whether we have answered our research question, especially focusing on validating our analytical framework. Such validation will be done along these three basic criteria:

- Conceptual soundness: As a tool (formal language) is it clear and transparent to use?

Conceptual validity means that the theories and assumptions underlying the conceptual model are correct, or at least justifiable, and that the model representation of the system, is reasonable for the model’s intended use (Watson, Scrase et al. 2010). We contend that the framework is internally consistent if there is a single, relatively unambiguous way of interpreting the diagrams (Rykiel Jr 1996, Barreteau, Bots et al. 2010). Hence we must specify clear rules in order to help the analyst map real world systems. This will be done in chapter 3, where we define attributes to each element of the analytical framework, such as what an actor is, what a rule is and what a process is. The aim is to produce representations that are systematic and readable.

- Usability: Does the application of our framework produce meaningful insights?

When is our framework usable – when it can articulate and bring to fore the essential elements of a case study. An analytical framework frames our focus and our way of thinking. Usability determines whether our framework has helped us in answering our research question, and whether it does what it is meant to do (EC 2010).

- Completeness: is our framework complete?

Our framework is complete when it is neither superfluous nor incomplete, while at the same time allowing us to answer our research question it is intended to (Rykiel Jr 1996).

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Chapter 1: Introduction

Step 6 of our research is about brief reflection. This will be done in chapter 8, where we will provide general recommendations to scientists and policy makers.

Figure 1.1: Research approach

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Chapter 1: Introduction

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Chapter 2: Transitions in STS

Chapter 2: Transitions in Socio-Technical Systems

Transition

Energy infrastructures are capital intensive with long lifecycles (Hughes 1987); hence incumbents seem to have vested interests, where each incumbent tries to maximize its own profits rather than collective gains. In this way, they perpetuate the existing system development path without any fundamental changes (Nielsen and Elle 2000). Even if there is a mutual understanding of the need to achieve transition towards sustainability at global levels, it remains to be seen how and where the transition process should start and progress. Enabling transition within a socio- technical system is deeply complex because of the range and variety of actors involved, each with their own agenda and perspective about the system, making coordination difficult (Rotmans and Loorbach 2009, Loorbach 2010).

In established socio-technical systems (STS), path dependency guides the direction of system development – history shapes the future, thus representing a barrier for new technologies (Liebowitz and Margolis 1995, Mahoney 2000, Unruh 2000). New technologies cannot easily compete with incumbent technologies, as they have yet to benefit from the reinforcing mechanisms of path-dependency and lock-in (Arthur 1989, Schot and Geels 2008). Against these mechanisms that favor incumbent technologies and products, new technologies are assumed to be adopted if they get the opportunity to develop and improve in a niche (Kemp 1994, Geels 2002, Rotmans and Loorbach 2008). Niches can potentially allow new technologies to escape lock in, by helping the technology to overcome initial barriers of high costs; the non-availability of complementary technologies; institutional rigidities; and the nonalignment of a new technology to the external environment during the infancy period (Mulder, Reschke et al. 1999, Schot and Geels 2008). Developing in niches enables a new technology to find early adopters and create the much needed initial bandwagon effect to help it diffuse (Raven 2005, Caniels and Romijn 2008).

The logic for creating a space for niches follows from the emergent characteristics of a system, which means that a small initial change in the system may have a great impact on the system in the long run (Holland 1992, Rotmans and Loorbach 2009). This transformation of a niche technology to a full-blown STS is a transition . Transition can be understood as the processes of structural change in major societal subsystems – they involve a shift in the dominant structures, a transformation of established technologies and societal practices, and movement from one state of relative stability to another state of relative stability (Newman 1996, Rotmans and Loorbach 2009).

Current literature claims that transition at an aggregated system level can be explained by a multi-stage and multi-level process (Geels 2001, Rotmans, Kemp et al. 2001, Geels 2002, Rotmans and Kemp 2003). A multi-stage process explains the progression of system change over time, and

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Chapter 2: Transitions in STS multi-level process captures the complexity of the interaction of a niche with the incumbent system and the subsequent emergence of a new system configuration.

Multi-stage dynamics

Multi-stage transition dynamics can be explained as system transformation from a state of relative stability (during the pre-formation stage) to quick development and instability (during the path formation stage), reverting to relative stability at the final path dependence stage (Hughes 1987, Rotmans and Kemp 2003, Kaijser 2004). The final stabilization phase of relative stability is a dynamic equilibrium state, characterized by the establishment of a new status quo (Parto 2007). The multi-stages (as captured in figure 2.1) at conceptual level are described in terms of three stages:

1. The pre-formation stage of relative stability where the status quo does not visibly change but in which the seeds for change germinate. This stage characterizes the presence of many niches (seeds for change), each vying to succeed (Rotmans and Loorbach 2009). Each niche is vying for the initial bandwagon support to succeed, and once the initial bandwagon is garnered the niche moves to the second stage of path formation. The Bandwagon effect implies that if a set of users adopts one technology, then that same choice thereby becomes more attractive to other users (Farrell and Saloner 1986).

2. The path formation stage where the process of change gets underway because some niches break out challenging the status quo and finding wider application and support by garnering the required bandwagon support from stage 1. During this stage the original niche garners momentum, and there are collective learning processes, diffusion and embedding processes (Caniels and Romijn 2008, Schot and Geels 2008). Visible structural changes are taking place throughout the system where new structures emerge and old structures become obsolete (Loorbach 2007).

3. The final path dependence stage is the stabilization stage where the speed of the structural change decreases and a new state of relative stability is reached. This stage is characterized by the establishment of a new status quo based on the newly successful niche (Rotmans, Kemp et al. 2001). This entails the formation of new structures, which impart stability to the STS. This stage is characterized by techno-institutional lock-in, wherein technical and institutional structures restrict changes in each other (Liebowitz and Margolis 1995, Parto 2003).

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Chapter 2: Transitions in STS

Figure 2.1: Multi-stage transition process, showing changes in STS as a function of time (adapted from (Rotmans, Kemp et al. 2001))

Multi-level dynamics

Multi-level dynamics in transitions in STS can be conceptualized as the interplay between three levels – technological niches (micro), socio-technical regime (meso) and landscape developments (macro) (Rip and Kemp 1998, Geels 2002). Herewith the transition processes can be explained by the interplay of landscape developments (as shown putting pressure on the socio-technical regimes) combined with the emergence of innovations at the niche level. Niches that are successful in diffusing eventually do manage to destabilize the existing socio-technical structures and form a new one. A niche is a nascent socio-technical system with a structure that is dissimilar to that of the existing system. Here, nascent implies that all the social and technical structures relevant for the proper functioning of an STS are not yet established.

A multi-level perspective, captured in figure 2.2, characterizes pressures from both the landscape level and the niche level for the socio-technical regime to change. The socio-technical regime accounts for the stability of an STS through the coordinated and aligned activities of all the actors that are part of the system. Where a technological regime is the overall complex of scientific knowledge, engineering practices, production process technologies, product characteristics, skills and procedures, institutions and infrastructure which make up the totality of a technology (Smith 2000).

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Chapter 2: Transitions in STS

Figure 2.2: Multi-level perspective (source: (Geels 2002))

The Transition Management perspective for studying transitions conceptualizes regimes as intermediaries between, on the one hand, specific innovations as they are conceived, developed and introduced – by specific people, teams, or firms; and on the other hand, broader social configurations that are known as landscape development (Rip and Kemp 1998, Geels 2002). Landscape developments consist of conditions – geopolitical circumstances, physical infrastructures, social norms and preferences, macroeconomic parameters, and demographic trends (Franssen 2003). Furthermore, the multi-level perspective does acknowledge the fact that changes at different levels occur at different time scales – niche level changes are more immediate in nature and individual actors can influence these changes. The regime level is characterized by stability; hence individual actors can influence the regime only very limitedly and indirectly, and change at this level occurs over longer periods, in the order of years or decades. Landscape developments occur over an even longer period of time, sometimes even centuries, and individual actors have no influence over these developments.

Within the Dutch Energy System, for example, a niche level can be understood as the combined heat and power (CHP) niche, wherein a single fuel source such as natural gas is used for generating electric power and useful thermal energy for heating or cooling. The regime can be understood as the incumbent electric power system and landscape developments can be understood as global warming. In the Netherlands, the potential market for micro-CHP (henceforth just referred to as CHP) is high, as it can probably take advantage of the extensive gas infrastructure connecting almost 97% of the households (Zachariah-Wolff, Egyedi et al. 2007) and secondly due to the relatively cool climate where heating is required for most of the year (Meijer, Hekkert et al. 2007). Combined production of heat and power decentrally and on-site would make sense, as the consumer is dependent on only one energy feedstock and the energy provider has to maintain only one type of system. Power production through CHP allows the capture of heat that is released in the combustion process, and this heat can be used for heating (space heating or other uses) thus improving the total

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Chapter 2: Transitions in STS energy efficiency of the system and in turn reducing emissions (Daniëls, Boerakker et al. 2007). Then at the regime level we have the existing electric power system that has already invested in centralized power plants and long cables and supporting assets to transfer this power from the power plants to each consumer. The regime has sunk costs, and incumbent actors have vested interests to recover the cost of their assets. At the landscape level we have developments such as global warming that calls for new innovative ways to reduce our energy usage and our emissions from energy usage.

Socio – Technical Systems

Socio-technical systems encompass both technical and institutional structures (Ottens, Franssen et al. 2006, Peter Kroes 2006). Within an energy infrastructure system, a technical structure is a physical object with a purpose. If we take away the purpose (or the functional properties) of a technical structure, what remains is just a physical object (Priemus and Kroes 2008). In this research we term technical structures as assets. These assets include machinery, pipes, buildings etc. Assets provide structure for the flow of energy, allowing actors to produce, transport and distribute energy (Herder and Verwater-Lukszo 2006, Weijnen and Bouwmans 2006). Once the investment in such assets is made the economic return period is often very long, thus inhibiting actor decisions to invest in new assets (Thissen and Herder; 2003, Geels 2004).

Mere physical objects are not assets. Their function turns them into an asset and it is their function that ties assets to human action, because it makes no sense to speak about technical functions without reference to a context of actor’s action (Ottens, Franssen et al. 2006, Peter Kroes 2006). Assets are understood through the eyes of the relevant actor, and depending on the context the same asset can have different interpretations (Bijker 2006). For example, uranium can be used to solve the world’s energy problems if it produces nuclear power to power households and industry, or on the other hand it can be used to produce a nuclear bomb that can annihilate cities. In other words, the function of an asset is grounded on the one hand in its physical properties or capacities, on the other in its relation to the intentions of actors (such as designers and users etc.). Actors design, manufacture, and implement assets to realize its function (Kroes and Meijers 2006, Vermaas 2006, Bijker 2010).

Just like the technical structure, the social (or institutional) structure of socio-technical systems is man-made (Peter Kroes 2006). An institutional structure is a set of rules established to facilitate (constrain and enable) the behaviour of actors (Ostrom 1986). Rules reduce uncertainty by providing a structure to everyday life (North 1990, Williamson 2000). Actors devise and implement rules. The point to note is that the rules are “actor-devised”, in the sense that they are a product of social interactions among actors (thus, technological constraints like the “laws” of physics are not considered to be rules) (Ostrom 1986, North 1996). Rules are not mere constructs but part of the system – rules co-evolve during the development of the STS, and they change or are changed as system processes are modified (Williamson 2000, Kunneke 2008, Naidoo 2008).

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Chapter 2: Transitions in STS

Williamson (2000) provides a useful framework for evolution of rules, as presented in table 2.1 (Williamson 2000). This four layer model aims at distinguishing between different levels of rules and the time required to bring about changes at each level. At level 1 (lowest) we have the operation & management level where continuous operational decisions are being made in response to the technical status of the respective system; at level 2 we have the governance level where the rules evolve over 1-10 years and determine the protocols governing operational decisions; at level 3 we have the institutional environment level where the rules evolve over 10-100 years, and they determine the formal rules of the game; and at level 4 (highest) we have the embeddedness level where the rules evolve over 100-1000 years, as they are rooted in the culture, traditions, religion, etc. Furthermore, the Williamson 4-level framework also specifies the relations between the various levels and rules. Between the levels, a vertical relation exist in which the higher level constrain and shape the lower ones and in which lower levels call on (or exert pressure) higher levels, to bring about changes in the rules at the higher levels.

Table 2.1: 4-level framework for the evolution of rules (source: (Williamson 2000))

Level/ Time scale

Level 4: Embeddedness Changes 10 2 to 10 3 years, often non-calculative or even spontaneous

Level 3: Institutional environment Changes 10 to 10 2 years, design of overall institutional setting

Level 2: Governance Changes 1 to 10 years, design of efficient governance regime

Level 1: Operation and Management Continuous adjustments

Here we will briefly discuss how the 4-level framework correlates with the MLP of the Transition Management framework. This correlation is shown in figure 2.3. The ‘Landscape level’ of the MLP correlates with the ‘Level 4: Embeddedness’ of the 4-level framework. At this level, the rules evolve over 10-100 years. The ‘Regime level’ correlates predominantly with the ‘Level 3: Institutional Environment’ and ‘Level 2: Governance’ 2 of the 4-level framework. The regime level consists of the rule-set governing the operations and development of the STS.

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Chapter 2: Transitions in STS

Niche is a special space created within the STS. Although, a niche STS has not evolved over long periods of time, it cannot work without rules at the governance level (example: contracts), and the institutional environment level (subsidies, taxes, etc). While creating a niche, the entire established governance or the institutional environment level is not changed, but a special space is created so that the niche can operate within specially designed rules. This is made possible, because niches allow experimentation within which it is possible to deviate from the rules of the established STS. This correlation of the ‘Niche’ level with the ‘Governance’ and ‘Institutional Environment’ levels is shown as a dotted line in our figure. The dotted line imply that although this is not a direct one-to- one correlation between the levels, there are some specially designed niche rules that correlate to these levels. These specially designed rules, at the niche level, offer protection to the niches during the pre-formation phase of their development.

Rules at the ‘Level 1: Operation and management’ are not relevant for our study of transitions, as these rules are focussed on continuous adjustments and not in shaping the processes that produce new structures.

Figure 2.3: Correlation between the MLP and the 4-level framework for evolution of rules

Delineating rules

Crawford and Ostrom (1995) provide an “ADICO” grammatical syntax for delineating rules (Crawford and Ostrom 1995). The ADICO syntax is an acronym that stands for five subcomponents of an institutional structure:

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Chapter 2: Transitions in STS

Attribute (A), Deontic (D), aIm (I), Condition (C), and Or else (O). Where Attribute is a holder for an actor to whom the rule applies to; Deontic is a holder for the three modal verbs using deontic logic (may – permitted, must – obliged and must not – forbidden); aIm is a holder that describes particular actions or outcomes to which the deontic is assigned; Condition is a holder for those variables which define when, where, how and to what extent an AIM is permitted, obligated and forbidden; and Or else is a holder for those variables which define the sanctions to be imposed for not following a rule (Crawford and Ostrom 1995).

For the purpose of this thesis we will differentiate between two kinds of rules: regulative, and normative. Regulative rules are the rules with an Or else holder, where the rule specifies which sanctions would be imposed if an actor fails to comply with a rule. Regulative rules refers to consciously designed formal rules, which constrain behavior and regulate interactions, e.g. property rights, contracts, standards (Scott 1995). Regulative rules are legally sanctioned and enforced. These rules include explicit sanctions to ensure actors follow the rules (Knickel, Brunori et al. 2009). An illustration of regulative rule is the power frequency rule, which specifies that power supplied to the grid in Europe should be 50 Hz and power in the USA should be of 60 Hz (Stam 2011).

Normative rules confer values, norms, role expectations, duties, rights, responsibilities (Geels 2005). Normative rules are without an Or else – in this case a sanction is not clearly specified. Normative rules are morally governed and enforced via normative pressures, such as social sanctioning through ‘shaming’ or ‘guilt.’ Actors follow certain ‘moral’ patterns of behaviour not because of fear of economic (or physical) sanctions, but first of all because they are part of their conscience (Knickel, Brunori et al. 2009). An example of normative rule is the Kyoto Protocol that outlines a framework for different countries to reduce their emissions, but at the same time does not define any specific sanctions if they are not able to meet their own emissions reduction targets (UNFCCC 1997).

The above two types of rules can be defined with the ADICO syntax as follows:

Regulative rules consist of the entire ADICO syntax, an Attribute, Deontic , aIm , Condition , and Or else . Example: A windmill operator in the Netherlands must supply 50 Hz power to the grid when connected to the grid, or else he will be fined.

Normative rules include the Attribute , Deontic , aIm , and Condition (ADIC); they are without a sanction (without the Or else) Example: A windmill operator in the Netherlands may supply power to the grid.

Similar to assets, rules are context-specific, they are understood through the eyes of the relevant actor, and depending on a context the same rule can have different interpretations for different actors. Rules are deliberately devised to address a particular time, place, and actors (Polski and Ostrom 1999). For example, the rule of security of supply implies two different things in two different countries. In countries such as the Netherlands or Germany security of supply is

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Chapter 2: Transitions in STS understood as almost 100% availability of power supply now and in the future (Deconinck, Belmans et al. 2006). However, this rule would not make any sense in a country such as India where power supply is intermittent at best and regular power outages are a norm as there are regularly planned brown-outs (Singh 2006, Joseph 2010).

Structure – Actor duality

Both technical and institutional structures are actor devised, but at the same time actors’ actions are constrained by the rules (institutional structures) and Assets (technical structures). Rules determine the choice of actions available at the disposal of actors (North 1990). For example, an actor is expected to pay for the natural gas he consumes; he cannot expect to avail it for free, unless clearly mentioned that way. Similarly the technical capabilities and limitations of each asset determine the actions of actors (Ottens, Franssen et al. 2006, Peter Kroes 2006). For example an actor producing power via a CHP unit in the Netherlands cannot feed-in 60 Hz power to the grid, as it is not compatible with the Dutch power system.

A duality emerges as structures (rules and assets) constrain action, but, simultaneously, action serves to produce, maintain and modify structures (Giddens 1984, Naidoo 2008). The duality ensures that actors are not free to perform any action they desire. They are part of the society and there are repercussions for any action. As presented in the discussion above, there are specified or else sanctions of regulative rules or social sanctions for norms, to shape actors actions. Structures are established by so-called "knowledgeable" and “empowered” actors, they are the actors who know what they are doing and how to do it (Giddens 1984, Baber 1991). For example, assets can be established by an actor who has the technical and business knowledge to make it happen, and rules can be established by an actor who is empowered to do so, say the Dutch government. Hence, structures must not be conceptualized as simply placing constraints on actor’s actions, but also as enabling actions. And, if sufficient actors who are knowledgeable and powerful enough act in innovative ways, their action may have the consequence of transforming the very structures that gave them the capacity to act (Sewell 1992). This can potentially bring about the changes in the structures of the STS these actors are part of, and it is in this way that a niche can potentially bring about transition.

Structure constrains actor’s actions but at the same time action is shaped by the actor’s own intrinsic needs. We assume actors are purposive actors, which means that they have a set of preferences or needs and they seek satisfactory means to pursue their needs (Hernes 1976, Hofferberth, Brühl et al. 2011). Each actor has its own attitudes, agendas, resources and perspectives – these form the intrinsic drivers for that particular actor, while developing a new structure (Brugha and Varvasovszky 2000, Patil, Ajah et al. 2009). Intrinsic needs of an actor create motivation for actor’s actions. Maslow (1943) has set up a hierarchy of five levels of basic needs for mankind (Maslow 1943). These needs capture the basic intrinsic drivers for any actor’s actions, and show why any actor has to take actions (Simons, Irwin et al. 1987):

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Chapter 2: Transitions in STS

Physiological Needs : These are the basic biological needs - need for oxygen, food, water, etc. They are the strongest needs because if a person is deprived of all needs, he or her own survival is at stake. Safety Needs : When all physiological needs are satisfied and are no longer controlling thoughts and behaviors, the needs for security can become active. This includes security of body, employment, resources, family, health, etc. Needs of Love and Belonging: When the needs for safety and for physiological well- being are satisfied, the next is the need for love, affection and belongingness. Maslow states that people seek to overcome feelings of loneliness and alienation. This involves both giving and receiving love, affection and the sense of belonging. Needs for Esteem : When the first three classes of needs are satisfied, the needs for esteem can become dominant. These involve needs for both self-esteem and for the esteem a person gets from others. Humans have a need for a stable, firmly based, high level of self- respect, and respect from others. Needs for Self-Actualization : When all of the foregoing needs are satisfied, then and only then are the needs for self-actualization activated. Maslow describes self-actualization as a person's need to be and do that which the person was "born to do." "A musician must make music, an artist must paint, and a poet must write." These needs make themselves felt in signs of restlessness.

The classification of needs is relevant for this research, not so much the hierarchy of them as we are not going to rank which need is more relevant than others. Here we would like to point out that the basic Physiological needs for food, water, oxygen, etc and Safety needs about security, employment, health as primary drivers for an actor’s action. All these basic needs are dependent on energy, at least in most of the developed World, as energy plays a fundamental part in people’s life (UNESCAP 2006). Actors strive hard to maintain their basic lifestyle, ensure continuity and prosper. With regards to the energy system, these intrinsic drivers can be along the lines of financial resources – for example to improve the return of investment and cost recovery (Cardone and Fonseca 2003, Unnerstall 2007). Or for a Green Image eventually to help in marketing - Toyota for instance benefited a lot because of their Green (electric-hybrid) car ‘Prius’. Due to positive externalities Toyota was able to increase revenues, market share and reputation (Heutel and Muehlegger 2010). Intrinsic drivers listed above along with the extrinsic drivers modulated by the structure shape actors’ actions, creating incentives and disincentives for an actor to take actions. If an actor has no intrinsic needs (in case he has given up on survival) he would have no desire to act or to produce processes. For example, there are subsidy programs that have a fixed life-span after which they will be shut down. Actors associated with such a fixed-term program would not take action to perpetuate the project as it is bound to shut-down at the end of its lifespan. In this case extrinsic drivers alone cannot create incentives for an actor to act. This shows that both intrinsic and extrinsic drivers are necessary to shape an actor’s actions.

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Chapter 2: Transitions in STS

Structure and Process

In this research we conceptualise structure as something static, which guides something dynamic that is the process. Although structures are static only within a chosen time frame, we conceptualize them as dynamically static or stable where they are changeable over time (Mathiassen 1987, Orlikowski 2000). This quality of dynamic stability ensures that structures within an STS can change over time and transition is possible (Newman 1996, Rotmans and Loorbach 2009).

Structures (both Assets and Rules facilitate processes within the system (Bergek, Jacobsson et al. 2008, Jacobsson and Bergek 2011). Structure within the context in which it is implemented, facilitates a process that produces the intended output (Suurs and Hekkert 2009, Bots and Daalen 2012). Structure enables or constrains actor’s actions while the actor carries out actions within the system. For example: The power grid (asset) in the Netherlands is designed and developed by the actors to facilitate the flow of power from one point to another, and the frequency standard of 50 Hz (rule) determines the frequency of the power that is transported. The operational output further modulates the drivers for the actors to act. For example: if the frequency of the power does not comply with the standard, there is a feedback loop with information , which compels an actor to take measures. As shown in figure 2.4, structures facilitate processes resulting in an Output. Here output is the flow of the power, which is modulated by the rule of the frequency standard that ensures the power flow is of required frequency and facilitated by the asset of the grid.

Figure 2.4: Structure facilitating processes, to produce output

Structure facilitates processes to produce an output. This output is fuel for rules that create external pressures to activate actors to produce processes through which new structures are created. Which in turn facilitate more processes, and the cycle continues. This can be explained with the example of the Kyoto Protocol, which is an institutional structure (rule). This rule has facilitated

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Chapter 2: Transitions in STS the creation of an output (CO2 reduction Targets). This output, the CO2 reduction targets, has created external pressure on actors (EU policy makers) to establish a Rule (European Union Emission Trading Scheme (EU ETS)). This rule (EU ETS) has facilitated the creation of an output (CO2 price). This output has created external pressures on actors (Energy Sector) to create a rule (a Merit-order for power production), and creation of new CCS (Carbon Capture and Sequestration) assets.

Furthermore, actors produce actions (processes) that facilitate production of an output. Sometimes this output is a structure, which is relevant for this analysis as that brings about transition. During our analysis we focus only on structures facilitating processes, as this will bring about transition. However, processes such as production, maintenance, etc that are facilitated by assets are not analyzed. We assume that actors use assets to produce output. Only reason to produce an asset is to make money. Hence, if an actor cannot make money from an asset, over time such assets disappear.

If an actor is not happy with the output of his processes, he can either change his intrinsic motivation, or change the structure that shapes its processes. If it is not the main actor influencing the development of this particular structure he wants to be changed, he can lobby with more influential actors controlling the development of this particular structure to have it changed. We will explain this with the help of CHP example in the Netherlands. In this example, A1 is an actor that invests in CHP assets; S1 is the structure that facilitates this process of establishing of CHP assets; A2 is an actor that has established the structure S1, in this case the Dutch government; and S2 is the structure that facilitates this process of establishing S1.

Actor A1, has an intrinsic motivation to make money from his processes. To do so he has invested in a CHP asset that produces power and heat, this is sold by the actor to make money from his investment. Actor A1’s processes are governed by the rule (S1) such as the power frequency rule, safety rule, etc. Actor A1 is not happy with the amount of money he makes from the CHP. There are two options at this point for A1 to continue his processes – firstly he could change his intrinsic motivation so that he is happy with the money he makes, or else he can augment his income by other means, such as a subsidy program or a feed-in-tariff rule for CHP. Changing his intrinsic motivations can be managed by A1 himself. But to augment his income, or for instance to establish a feed-in-structure he has to lobby to other actor, in our case Actor A2. A2 is capable of changing S1, wherein a new feed-in-tariff rule can augment A1’s income, from his CHP assets.

This example highlights the resource dependency relationship between A2 and A1, where A1 is dependent on A2 for this particular process; and a dependency relationship between S2 and S1, wherein S2 shapes the development process of S1.

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Chapter 2: Transitions in STS

Figure 2.5: Motivation to develop new structures.

Discussion

Dominant views on transition in Socio-Technical Systems are centered on the system level dynamics of the STS, where the emphasis is on an aggregated overview of the system, as seen in the S-curve for technology diffusion (Rogers, Neil et al. 2001) or the S-curve for transitions (Rotmans, Kemp et al. 2001, Geels 2002, Rotmans and Kemp 2003). Researchers in the field of technology diffusion, model the price-performance curves using System Dynamics technique (Lyneis 1993). The focus of such modeling is less on the actors and structures but more on the mechanisms that influence the processes. For instance, System Dynamics modeling can give insight into at what subsidy (or price) level actors start investing in a certain technology (Kim 2003, Yücel and van Daalen 2012). Researchers in the field of Transition Management focus on the multi-level perspective to gather insight into the transition process. This has been done through a generic language of landscape, regime and niche level dynamics, but since there is no formal systematic modeling procedure within this field there is no assessment of whether the necessary causal factors it postulates are sufficient in order to bring about the transition (Papachristos 2011), or if there are other hidden unidentified factors that have actually brought about the transition. For example the Transition Management framework is centered on the concept of “regime,” which hosts the rule-set governing system development, but due to the absence of a formal systematic modeling procedure it lacks the ability to dissect and diagnose the “regime.”

Existing literature agrees that bringing about a transition towards a sustainable energy system is a Chicken & Egg problem, where actors do not know which structure should come first (McKay 1992, DeCicco 2003). As STS are complex systems and exhibit emergent behavior (Holland 1992, Gifford 1995, Rotmans and Loorbach 2009) we propose that such developments should not be analyzed only at the higher system dynamics level, but a more detailed structural analysis is required to gather insight into the transition. For some unclear reason a systematic structural

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Chapter 2: Transitions in STS analysis of STS is not main-stream yet. This may be as such detailed structural analysis may be observed as trivial, or because such analysis does not deliver expansive s-curves showing higher level system dynamics. We would like to analyze each process that helps the formation of a new structure during transition, and in turn which processes are facilitated by this newly formed structure. Within an STS some structures relevant for transition towards a sustainable energy system are already present, and some have to be newly established – our conceptualization of the system presented as the structure and process duality can help us in developing an analytical framework to understand this. Such detailed structural analysis can impart insight into the potential alternate transition paths and the assets and rules that are required for each of these potential transition paths.

Current literature has alluded to the relevance of the structure and process duality for analyzing structural changes in social-technical systems (Hernes 1976, Mathiassen 1987, Bots and Daalen 2012). Especially, the literature in the field of Technology Innovation Systems allows us to analyze and evaluate the development of a particular technological system in terms of structures and functions that support or hamper it (Jacobsson and Bergek 2004, Bergek, Jacobsson et al. 2008). Here functions are activities that influence the establishment of structures, and the eventual build- up of a Technology Innovation System (Hekkert, Suurs et al. 2007). However, it still lacks a systematical modeling procedure that can carry out detailed structural analysis, along with the associated actors and processes.

The next chapter presents our analytical framework and the corresponding methodology to apply it in order to obtain insights into the transition process.

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Chapter 3: Analytical Framework - TranScript

As discussed in chapter 2, all processes produce an output. If such output entails establishment of a new structure, then that is relevant for our analysis. In this thesis we study transitions, which is a process through which one or more new structures are established.

The analytical framework as developed during this research is revealed in figure 3.1. As this framework is intended to script transitions, through detailed structural analysis along with their accompanying actors and processes, we name it TranScript. TranScript captures the duality between the actor and structure, where actor creates structure, but at the same time actors’ actions are facilitated by a structure (more specifically, rules). The external pressures, modulated by the rules of the system, create drivers (incentives or disincentives) for actor to perform actions in order to develop a Structure. This new structure emerging from actions can be either technical (assets) or institutional (rules) structure. The structure that is developed is “dynamically stable.” Dynamic stability ensures that structures within an STS can change over time and transition is possible.

Figure 3.1: Analytical Framework - TranScript

Below we will elaborate on each building block (elements) of TranScript:

Actor

An actor is denoted by a rectangular box with straight corners. Actors within the system design, produce and implement both Rules and Assets (Ostrom 1986, North 1990, Bijker 2006, Bijker 2010). Each actor has its own attitudes, agendas, and perspectives – these form the intrinsic drivers for that particular actor, while performing actions (Brugha and Varvasovszky 2000, Patil, Ajah et al. 2009). As observed in this research, an actor can be defined as an entity that can produce actions; such entity can be an individual (where a consumer or a group of consumers act) or a company. With regards to the energy infrastructure, the intrinsic drivers can be along the lines of financial resources (return of investment, cost recovery, marketing, green image), continuity (operations,

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Chapter 3: Analytical Framework - TranScript expansion), safety, reliability, affordability, etc (Cardone and Fonseca 2003, Unnerstall 2007, Weible 2007).

Structure

A structure (both Rule and Asset) is denoted by a rectangular box with rounded corners. Structure could be a Technical Structure we call an Asset, or an Institutional Structure we call a Rule. With respect to an Energy System, Assets include machinery, pipes, pumps, buildings etc. Assets facilitate the flow of energy, allowing actors to produce, transport and distribute energy carriers and services (Bots and Daalen 2012). Rules enable and constrain actor’s actions, thus they regulate the process of the flow of energy (Ostrom 1986, Scott 1995). Rules are “actor-devised”, thus, technological constraints like the “laws” of physics are not considered to be rules (Ostrom 1986, North 1996). In our analysis we assume that Assets are built to be used, or else they would not be built. Similarly, rules would be followed or else they would not be established. If either assets or rules are not used or followed, respectively, they will disappear over time.

External Pressures

External pressures that shape processes are always a Rule, modulated by system condition (this is the If clause for the rule, which ensures that relevant actors are activated to take action). External pressure is denoted in a rectangular box with curved corners, as it is a Rule. System condition (state of the STS at a given moment in time) activates actor to take action - this allows us to capture technical or social pressures in the form of rules. External Pressures activate actors to take action, and these actions are shaped by the rules. This can be elaborated with the following example: Earthquakes in the Groningen region of the Netherlands are creating safety issues for future exploration of Gas (Noordhuis 2013). Traditionally the Netherlands have been a gas exporting country, primarily due to its huge Groningen gas reserves. But recent earthquakes have put pressure on the operators, to cut gas output, thus affecting future security of supply and safety of the region. These two system conditions together with the rules of safety and security of supply have created external pressures on the actor, in this case the energy sector, to increase capacity (develop new assets) or to pass new regulation (develop new rules for gas import, etc).

Actions / Processes

Processes are denoted as a left to right horizontal arrow. This process arrow is the most important building block of TranScript. This arrow describes change; with regards to the energy transition it describes the development of new structures relevant for the transition towards a sustainable energy system.

The result of a process is an output, with regards to our research it is a structure. As our research focuses on transition, we focus on the outputs that lead to the development of new structures. Equilibrium is reached when either we have achieved the desired end-state, or the external pressures have gotten weaker over time. Thinking about sustainability, this implies that

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Chapter 3: Analytical Framework - TranScript either CO2 emissions are actually reduced (in this case the System condition of rising emissions is no longer influential) or the subsidies or taxes are exhausted (in this case the external pressures creating incentives or disincentives for actors to produce actions have gotten weak). This implies that the desired end-state will be reached when either or both, the system condition does not activate a rule (if the system condition of rising emissions is no longer influential, it won’t create pressures for the Actor to Act) or overtime rules determining those external pressure diminish (even if there is a need to reduce emissions, but there is no money for subsidies or tax rebates to create incentives for actors to act). This brings about a relative state of equilibrium for the system. In general terms, this implies that as actors are more successful in reducing CO2 or once the subsidies are exhausted, weaker the external pressures become overtime.

We will elaborate our framework with the help of the earlier CHP example, continued from chapter 2 (figure 2.5).

In this example, let us assume Actor A 1 is a Greenhouse operator who is interested in investing in CHP systems, and Actor A 2 is the Dutch Government. Intrinsic motivation of the Actor A 1, who is an entrepreneur, is to make money from its investment. While the intrinsic motivation of the Actor A 2 is to increase the diffusion of green technologies and promote sustainable development.

Actor A 1 operates a greenhouse, and until recently burned natural gas to produce heat required for the proper growth of the plants within its greenhouse. Now Actor A 1 identifies an opportunity where he can invest in a CHP system to produce heat that he requires, and sell the power produced in this process to the grid. Thus increasing returns on their investment.

When we apply TranScript to analyze this example, we get the following dynamics as presented in figure 3.2. Wherein the system condition of CHP technology is proven together with the rule of safety; along with the system condition that the power grid in the Netherlands operates at 50 Hz together with the rule of Frequency, and along with the system condition of return on investments together with the rule of cost recovery are calling on the Actor, in this case the Actor A 1 to invest in CHP assets.

Herein the norm of safety can be expressed in the ADICO format as: Actor A 1 must operate CHP systems safely when connected to the grid.

The rule of Frequency can be expressed in ADICO as: Actor A 1 must not supply power to the grid if it is not 50 Hz when connected to the grid, or else he will be fined.

And the norm of cost recovery can be expressed in ADICO as: Actor A 1 may invest in CHP systems if he is assured cost recovery from its investment.

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Chapter 3: Analytical Framework - TranScript

Figure 3.2: Investments in CHP assets

Let’s assume Actor A 1 is unhappy with the return of investment he is making on his CHP assets. He lobbies to Actor A 2, the Dutch government, for additional financial support. Once a large number of actors show interest in a common cause, it is possible for them to garner the attention of legislators for their demands to be met (Lyon and Maxwell 2004, Bergan 2009).

In our example Actor A 2 would like to promote the diffusion of green technologies such as CHP, and hence want to encourage investments in such technologies. To ensure that more actors invest in CHP, A 2 awards financial support in the form of subsidies to the actors investing in CHP. In the Netherlands such subsidies are through the SDE+ (Subsidieregeling duurzame energieproductie) instrument that awards a feed-in tariff for renewable heat or a combination of renewable heat and electricity from CHP (AgentschapNL 2012). The SDE+ incentives are structured as feed-in tariffs, and are financed through a levy on the energy bill of end consumers, which guarantee a minimum payment for renewable energy producers.

Figure 3.3, presents this dynamics wherein the system condition of rising emissions together with the rule of the Kyoto Protocol is calling on the Actor A 2, in this case the Dutch Government, to develop instruments to meet the 2020 Kyoto targets. One of the primary rules that has been devised by the Actor A 2 is the SDE+ instrument that encourages investment in green technologies.

The norm of Kyoto protocol can be presented in ADICO format as: Actor A 2 must meet its 2020 emission reduction target.

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Chapter 3: Analytical Framework - TranScript

Figure 3.3: Develop a framework to encourage investment in green technologies

Instruments such as the SDE+ have created incentives for Actor A 1 to invest in CHP assets. When actors invest in any assets, they are bound by the primary rule that is of Cost Recovery (Cardone and Fonseca 2003, Unnerstall 2007). The aim of the SDE+ rule is to encourage more actors to invest in green technologies. Herein the SDE+ rule can be presented in the ADICO format as: Actor A 2 must pay a feed-in tariff to Actor A 1 for the amount of heat and power supplied to the grid, or else Actor A 2 will face sanctions.

Figure 3.4, presents this dynamics wherein the system condition of investment in green power as a safe bet together with the SDE+ rule has created drivers for the Actor, in this case the Energy sector, to invest in green technologies.

Figure 3.4: Invest in green technologies

In the above elaborated example, it can be seen how ADICO syntax has helped us to capture the complex notion of rules. By using the ADICO syntax we have managed to breakdown complex social structures and operationalize rules. For example, a complex social structure such as the SDE+ policy instrument can be captured as a rule (a structure), which constrains and enables actions (processes) on the part of actors. Wherein an actor may , must and must not perform a certain action. This can be explained as below:

- A Greenhouse operator … may supply excess power to the grid…

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Chapter 3: Analytical Framework - TranScript

- The Dutch government… must pay a feed-in tariff to a Greenhouse operator… - A Greenhouse operator … must not supply power to the grid if it is not 50 Hz …

A may rule is always a right on part of the Actor. In this case there are no fixed sanctions, but if the rule does not hold true the actor has a right to appeal. In the above example, a greenhouse operator is not obliged or forced to feed the excess power generated to the grid, but if so he desires and there is a grid available he may be able to feed the power to the grid.

On the other hand, must and must not rules always include a sanction. These rules are an obligation, not just a right on part of the actor. In the above example, the Dutch government must pay a feed-in tariff to a greenhouse operator supplying excess power to the grid. In this case the actor is forced to obey or else there are sanctions.

This being said, we would like to say that we do not elaborate and operationalize each institutional structure into subsequent rules during our case analysis. We avoid this for the purpose of simplicity purpose and keeping in mind the scope of this thesis. We presented the above example, to show the readers what we mean when we present a rule, and this is how we have been looking at rules in this thesis. For example, we captured the norm of safety in terms of ADICO. This norm of safety can be further operationalized if need be. But given the scope of this thesis it is not necessary. It is sufficient to understand how the general rule of safety constrains and enables actor’s actions. Another important point to demonstrate is that norms or higher abstractions of rules (referring to the Williamson 4-level institutional framework discussed in chapter 2 (Williamson 2000)) can be operationalized into subsequent lower-level rules. The higher abstraction of the Safety norm can be broken down and operationalized into different lower level rules – this shows the embeddedness of the rules. The safety norm, which resides at level 4 of Williamson’s 4-level institutional framework, can be operationalized into the following subsequent rules at different levels.

Level 1: Actor 1 must not supply power to the grid if it is not 50 Hz… Level 2: Actor 2 must have a regular maintenance schedule to ensure safe operations… Level 3: Actor 3 must develop standards and ensure Actor 1 and Actor 2 follow them for safe operations …

Now that we have presented our framework to analyze transitions, along with an elaborate example, we will conceptualize transitions as observed in this research.

Conceptualizing Transitions

The focus of this thesis is to understand transitions in STS; in short it is to understand the process of structural change in STS. During a transition, new technical and institutional structures emerge, and old structures may become obsolete. A transition is complete when the movement of the STS from one state of dynamic equilibrium to another state of dynamic equilibrium is complete. Once these states of dynamic equilibrium are reached, it is very difficult for the system to move

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Chapter 3: Analytical Framework - TranScript away from it. These new structures are static, at least for some given time until new structures emerge, which facilitates the processes in producing a desirable and satisfactory output. Once the processes produce desirable output, actors are happy with the system and inhibit changes to the system. This is the reason why transitions are difficult; once actors are happy with the status quo they resist changes. This leads to a lock-in, until external pressures come along wanting to bring about transition or actors are unhappy with the status quo.

A successful transition has been accomplished when a desired end-state is reached and new structures are established. Some of the structures relevant for the transition towards a sustainable energy system are already in place (such as Kyoto Protocol, Alternative Fuel Technologies, etc), and some new structures have to be further established. Our work identifies the desirable end-state and then we identify which steps towards our desirable end-state are already present and which steps have to still be carried out. We look at the historical reconstruction of past states – aim here is to build a discrete system model that can help us in answering questions about the system. This is in some ways similar to the Backcasting approach where a vision for the future end-state is established and then different paths to achieve the end-state are presented (Quist and Vergragt 2006, Phdungsilp 2011), but at the same time different. Different because our research not only presents alternative paths to achieve the end-state but gives a detailed path that specifies the required structures to get to the desirable end-state. And secondly, but more importantly, within the Backcasting approach future end-state is a loosely defined concept, as it is used for guidance or orientation (Quist and Vergragt 2006, Quist 2008). However, in our analysis future end-state is a well-defined state of the STS with well specified structures.

Referring back to figure 3.1, depicting our analytical framework, we can say that a new dynamic equilibrium is reached when either the external pressures (shaped by rules) diminish or the end state is reached. For example: once Dutch 2020 targets are met, the drivers (incentives/subsidies) will cease to exist and the system will reach a dynamic equilibrium, unless of course there are new targets or rules acting as drivers for actors to change. But reaching equilibrium does not imply that a successful transition has taken place. A successful transition has taken place only if the new intended structures are established. If only the external pressures subside, while the intended structures have not been established, it may imply that the transition in STS has not taken place at all, or maybe an unforeseen transition has taken place.

As described in chapter 2, transitions start in niches as they act as breeding grounds to learn about alternative technical and institutional structures, through experimentation in the form of pilot projects, etc. Niches are positioned at the edge of the incumbent STS. They are developed by “so- called knowledgeable or empowered actors” who are looking at alternative opportunities to make money, improve their revenue, expand their business, improve social benefits etc. Niches offer a protected environment for new technologies to develop. Within niches some perceived transition enabling rules are introduced and some transition constraining rules are removed. Niches allow an actor to try new things, as all the rules predominant in the larger STS do not apply to this Niche environment. It is condoned to change some structures locally – remove constraining structures or add enabling structures at the local level.

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Chapter 3: Analytical Framework - TranScript

This thesis conceptualizes niches as a nascent socio-technical system with a dissimilar structure to that of the existing system. Here, nascent implies that all the social and technical structures relevant for the proper functioning of an STS are not yet established. For example: the niche of CHP in the Netherlands. As there was no precedence of power and heat production at household level, rules such as feed-in tariff had to be established so that households producing excess power could feed into the larger power grid and benefit from this. Furthermore, assets such as smart meters had to be in place so that power flow into and out of the households could be measured.

Below we will elucidate the suggested methodology in applying TranScript to study transition.

Research Methodology

Below we will present our research methodology, which is the basic procedure we follow to apply TranScript for analysing transition in an STS.

These six steps are listed below:

1. Identify the Necessary Conditions for a transition towards a Sustainable Energy System

2. Translate each necessary condition into sub-conditions

3. Apply our analytical framework to produce a basic diagram that identifies the actors that have the ability to influence these structures, and the drivers required to motivate these actors

4. Plot all the assets to get an overview of the total system in an AND/OR diagram

5. Produce system configuration diagram along with the relevant structures for transition

6. Interpret the system configuration diagrams, to outline the conditions under which transition would take place.

Below we will elaborate each of the steps.

Step 1: Identify the Necessary Conditions for a transition towards a Sustainable Energy System

In this step we identify the Necessary Conditions without which the transition cannot take place. These conditions include the structures that we assume are needed to be in place to bring about transition. As shown in figure 3.5, the necessary conditions 1 and 2, together can bring about the transition. For example, for a transition towards a hydrogen economy, necessary condition 1 would be that we have sufficient structures in place to produce the requisite hydrogen; and necessary

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Chapter 3: Analytical Framework - TranScript condition 2 would be that we have sufficient structures in place that allows us to transport and use the hydrogen. Together these two conditions would bring about the transition towards a hydrogen economy.

Figure 3.5: Step 1 – Identify the necessary conditions for Transition

Step 2: Translate each necessary condition into sub-conditions

In this step we have to identify the sub-conditions for each necessary condition. The sub- conditions should cover all the required relevant structures, within the system boundary, that would help in achieving the necessary condition. Some of these sub-conditions will themselves be Necessary conditions, and some will be alternate conditions. Here alternate condition implies that one or more structures can help us achieve the same necessary condition.

This process can be operationalized as below, with an example shown in figure 3.6.

a. General rule of thumb is to identify all the Assets first, and then follow with all the Rules. b. As we are talking about a transition in an energy system, we think of an energy conversion system. Where the end-use is heat, cold or mechanical power at the demand side and gas or power production on the supply side. These two extremes are bridged by numerous energy conversion steps. c. As shown in figure 3.6 a circle denotes the product of each energy conversion, and the arrow denotes the asset that will carry out such conversion. The aim is to identify all the assets relevant for our analysis, in this example they are Asset 1, Asset 2 and so on. d. Once we have identified all the assets, we can identify what rules shape the processes that develop these assets. The aim is to identify all the rules relevant for our analysis. For simplicity we will not elaborate and present each and every rule in the ADICO format. It is understood that all rules comply with our concept of rules, as defined in chapter 2.

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Chapter 3: Analytical Framework - TranScript

Figure 3.6: Step 2 – Identifying the relevant assets needed for transition

Step 3: Apply our analytical framework to identify the actors that have the ability to influence these structures, and the drivers required to motivate these actors

We now identify the actors responsible to produce the relevant structures identified in step 2. Each structure is produced by an actor. We should identify the external pressures (which are always rules, modulated by a system condition) for each actor that call on him/her to take action (generate processes) that produces these structures.

At the end of this stage, we will have our basic diagram with an Actor; External pressures; Processes and the Structure that is established. The syntax for presenting this is as follows:

Actor – Rectangular Structure – Rectangular box with Process – Arrow box, (with shorthand for rounded edges (with short hand for from left to right Actor as A) rules modulated by system condition as R and C respectively, when acting as external pressure). When structure is an output of a process, then it will be specified if this structure is an asset or a rule.

Step 4: Plot all the assets to get an overview of the total system in an AND/OR diagram

To do this we use an AND/OR diagram, as shown in figure 3.7. The assets are presented as an AND/OR diagram, where the required assets are shown as AND , and the alternate assets are shown as OR . OR implies that either lower level assets may be established for higher level assets to occur, and AND implies that both lower level assets must be established for higher level assets to occur.

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Chapter 3: Analytical Framework - TranScript

Figure 3.7: Step 4 - AND/OR diagram

Step 5: Produce a system configuration diagram along with the relevant structures for transition

To do this we identify the rules shaping the processes that produce these assets and rules. In this example, they are Rule 1, Rule 2 and so on. This gives us the system configuration of the desired end-state, as presented in figure 3.8, presenting the relevant structures required for transition. For simplicity we use a short-hand notation in the figure, where Rule 1 shaping Rule 2 actually implies that Rule 1 shapes the processes that develop Rule 2. Here we denote a transitive relation, where the direction of the arrow indicates that the first structure was influential in driving or shaping the development of the second structure. The direction of the arrows is collected from our case analysis, and signifies what rule has shaped the development of what structure (either rule or asset). Bolded (boundaries for) boxes in the figure present the assets and normal boundaries present the rules to be established for transition. Finally, assets and rules are not presented or positioned in any order, they are presented in a way to minimize crossing edges of arrows and minimize edge lengths.

We employ the following heuristics to identify the crucial rule(s) for transition. A rule can be identified as being crucial for the transition if it drives a crucial process. Crucial processes can be identified by referring to the AND/OR diagrams, as presented in step 4. Referring to our example in the figure 3.7, the processes involving both Assets 2 and 3 are crucial to the transition. In this example there is no alternative transition path – for Asset 1 to realize both lower level assets, Asset 2 and Asset 3, have to be established first. The rules that drive the processes to establish Asset 2 and

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Chapter 3: Analytical Framework - TranScript

Asset 3 are crucial for the transition. If from the AND/OR diagram the crucial rule cannot be clearly identified, as there are no exclusive AND relationship within the assets, then all the rules are equally important.

Figure 3.8: System configuration presenting the relevant structures for transition

Step 6: Interpret the system configuration diagrams to outline the conditions under which this transition would take place.

Once we have the system model, with the system configurations, of the desired end-state we can explain the available potential transition paths towards a sustainable energy system. Transition paths can be defined as system configuration along with the sequence of structures. System configurations show the relevant structures for the desired end-state, but transition paths also include the variable time . Hence transition paths elucidate which structure comes first and which structures follow.

As our system configurations present all the relevant structures for the desired end-state, hence for each transition path we can identify the structures that need to be established, which actors would develop these structures and what the drivers for these actors are. Such structural changes could be either investment in assets or bringing about changes in rules. It is an underlying TranScript assumption that no structures are changed or new ones are created unless an actor acts. This implies that actors should have incentives to bring about these structural changes. Our guiding principle is look for incentives and the actors that will benefit from them to take action. It is underlying TranScript assumption that no structures are changed or new ones are created unless an actor acts. And no actor will act against his interests. Hence there should be incentives for an actor to act. This knowledge of the incentives actors need to develop structures, would give a clear idea to policy analysts how to cater to these intrinsic drivers of different actors in order to nudge the transition of STS towards a desired end-state.

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Chapter 3: Analytical Framework - TranScript

Testing our framework

To test our analytical framework we have analyzed three different cases by applying TranScript as per our research methodology presented above. Each case concerns an alternative fuel niche that has the potential to bring about the transition towards a sustainable energy system.

This research is part of the Greening of Gas project; hence the first case which was selected to be analyzed was the Greening of Gas case study. This case will be discussed in chapter 4. The Greening of Gas (VG2) case explores the feasibility of mixing and transporting hydrogen via the Dutch natural gas network (where VG2 is the Dutch acronym for Vergroening Van Gas (Greening of Gas)). The second case, Hydrogen for Transport, focuses on using hydrogen for public transport buses, will be discussed in chapter 5. We chose the public transport bus case as it is observed that this sector is a good candidate for experimenting, designing and implementation of alternative fuel technologies (DOE 2002, Tzeng, Lin et al. 2005). The third case, the District heating system (DHS) will be discussed in chapter 6, studies the feasibility of using residual industrial waste heat for district heating in a city in the Netherlands. This case was selected as households are major emitters of greenhouse gases, and transition towards a sustainable energy system should entail bringing about transition in this sector (Hens, Verbeeck et al. 2001, SESAC 2011).

Our analysis of the case study results in a system model (depicted by the system configurations of the desired end-state), which we will use to answer what transition paths are there towards a desirable sustainable end-state and what actors have to be mobilized to realize these paths.

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2)

Chapter 4: Greening of Gas Case Study

Given the fact that fossil fuels are finite, there is a need to explore alternative energy sources and energy carriers. The need to find alternatives is particularly urgent since experts agree that CO 2 emissions originating from fossil fuel usage are a major contributor to the greenhouse effect – leading to climate change. Hydrogen does offer a ray of hope – it has the potential to be a major energy carrier in the energy system of the future in which we require a cleaner, more reliable, long- term energy supply. The concept of a hydrogen economy is being touted as one of the hopes to reduce greenhouse gas emissions and improve energy security (HyNet 2004, NATURALHY 2006).

The Netherlands is one of the few countries in the world with a fine mesh gas distribution infrastructure. The Dutch energy supply relies on natural gas for approximately half of its energy requirements. 96% of all households, businesses and buildings are connected to the natural gas network (Gasunie 2010).The Netherlands further aims to strengthen its position in the European gas market. It has a strong knowledge position on natural gas production, distribution and end- conversion, and intends to acquire an equally strong knowledge position on emerging gaseous energy carriers (Gasunie 2009). If the existing natural gas infrastructure can accommodate hydrogen, then the Netherlands could choose to take a head start position in the transition towards a hydrogen economy.

The aim of this case is to study the transition from the existing natural gas system towards a mixture of hydrogen and natural gas within the Netherlands. This case study is part of the Greening of Gas (VG2) project in the Netherlands. VG2 case was carried out within the Dutch Economy, Ecology and Technology Program (E.E.T.), a joint initiative of the Ministry of Economic Affairs, the Ministry of Education, Culture and Sciences, and the Ministry of Housing, Spatial Planning and the Environment. This case was carried out by a consortium of partners from academia, industry and engineering consultancy. The partners are TU Delft, University of Groningen, TU Eindhoven, Port of Rotterdam, Linde Gas, ECO Ceramics, N.V. Nederlandse Gasunie, Electrabel, Adviesbureau Energy+i.d. and Schouten Research b.v.

Anticipating an adequate supply of sustainable hydrogen in the long run it is possible to cautiously embark on the transition trajectory by mixing hydrogen with natural gas in the existing grid (Zachariah, Hemmes et al. 2004, Patil, Levinsky et al. 2008). The mixing of hydrogen with natural gas (greening of the natural gas) would meanwhile bring the additional benefit of reducing decentralized CO 2 emissions in households and industries.

Necessary conditions for this transition to take place are primarily:

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2)

Necessary condition 1: Need to have excess hydrogen capacity, as the current hydrogen capacity has been accounted for. This condition can be studied further by answering the following question: Can we create excess hydrogen capacity?

Necessary condition 2: Need to be able to feed hydrogen into the existing natural gas network and to have end-user appliances that are compatible with the hydrogen and natural gas mixture. This condition can be studied further by answering the following questions: Can we mix hydrogen into the natural gas network – is it technologically feasible and is it institutionally allowed? And, can we have end-user appliances that are compatible with the hydrogen and natural gas mixture?

Each of the necessary conditions for transition will be studied further, by answering numerous sub-questions.

Necessary Condition 1: Need for excess hydrogen capacity.

The question to be answered is

Q 1. Can we create excess hydrogen capacity?

Excess hydrogen can be obtained in three different ways: A. Green hydrogen can be obtained through the conversion of wind or solar power into hydrogen via electrolysis of water. This condition can be further studied by answering the following questions:

Q 1A1. Can we build new green (solar and wind) power capacity? Q 1A2. Can we supply this green power to the grid? Q 1A3. Can we convert this green power into hydrogen?

B. Black hydrogen can be obtained through the conversion of fossil fuels into hydrogen along with carbon capture and sequestration. This condition can be further studied by answering the following questions:

Q 1B1. Can we produce hydrogen from fossil fuels? Q 1B2. Can we obtain extra natural gas or coal to be converted into hydrogen? Q 1B3. Can we utilize the CO2 emitted during the process? Q 1B4. Can we sequester the CO2 emitted during the process?

C. Carbon neutral hydrogen can be obtained by converting nuclear power into hydrogen via electrolysis:

Q 1C1. Can we build new nuclear power capacity? Q 1C2. Can we convert nuclear power into hydrogen?

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2)

Necessary Condition 2: Need to be able to feed hydrogen into the natural gas network and to have end-user appliances that are compatible with the hydrogen and natural gas mixture.

The question to be answered is

Q 2. Can we feed hydrogen into the natural gas network – is it technologically feasible and is it institutionally allowed?

This condition can be further studied by answering the following questions:

Q 2A1. What are the technical conditions under which the natural gas network operates? Q 2A2. What are the institutional conditions under which the natural gas network operates? Q2A3 What are the technical conditions under which hydrogen can be fed into the natural gas network? Q2A4 What are the institutional conditions under which hydrogen can be fed into the natural gas network? Q 2A5. Is there a precedence of other gases being allowed to be mixed into the natural gas network?

Q 3. Can we have end-user appliances that are compatible with the hydrogen and natural gas mixture?

Usage of a hydrogen and natural gas mixture will require appliances that are hydrogen ready. This condition can be further studied by answering the following questions:

Q 3A1. What are the technical conditions under which the end-user appliances operate? Q 3A2. What are the institutional conditions under which the end-user appliances operate? Q 3A3 What are the technical conditions under which hydrogen can be burnt by the end- user appliances? Q 3A4 What are the institutional conditions under which hydrogen can be burnt by the end-user appliances?

We apply the analytical framework developed in chapter 3 to analyze this case study. We start by addressing the above questions in order to make a system model. This model can be further used to address the questions raised in chapter 1, which are the functional requirements of our framework. Such discussion will include the number of possible potential transition paths, the structures that have to be developed for each transition path, the actor(s) responsible to develop these structures and the drivers for the same.

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2)

Necessary Condition 1: Need for excess hydrogen capacity.

Q 1. Can we create excess hydrogen capacity?

Today, hydrogen is primarily produced as a by-product of refinery activities; and primarily used as a chemical feedstock in the petrochemical, food, electronics, and metallurgical processing industries (Ramachandran and Menon 1998). The current hydrogen production more or less meets demand. Hence this implies that there is no excess hydrogen available to be mixed and transported via the Dutch natural gas network. To jump start towards a hydrogen economy, there is a need for additional hydrogen capacity, which will allow mixing hydrogen in the natural gas network.

Figure 4.1, presents this dynamics wherein the system condition (described as rising emissions along with the depletion of finite fossil fuel resources) together with the Rule of Dutch Climate & Energy Policy have created drivers for actors active within the Energy sector, such as current and potential hydrogen producers, to take action and install new hydrogen production assets.

Figure 4.1: Install Hydrogen Capacity

In accordance with the agreement of the European Union with regards to the Kyoto Protocol, The Dutch cabinet’s Climate and Energy policy plan (as presented in the Clean and Efficient: New Energy for Climate Policy, and The Netherlands: a country for innovation), calls for 14% reduction of emissions in 2020 when compared to 1990 levels (EC 2009, EZ 2011). Through the new SER Energieakkoord (Energy Agreement for Sustainable Growth), the share of renewables in the Dutch energy mix is targeted to increase from around 4% in 2012, to 14% by 2020 and further 16% by 2023 (SER 2013). Wherein more than forty organizations have signed the SER Energieakkoord – including central, regional and local government, employers and unions, nature conservation and environmental organizations, and other civil-society organizations and financial institutions – have come together to agree upon reducing energy consumption while at the same time increasing the proportion of energy generated from renewable sources (SER 2013). With only 6 years left to meet its 2020 renewables target and given the time it takes to develop, permit and install renewable energy capacity, a major increase in investment in Dutch renewable energy generation assets is required, if this target is to be reached (Winkel 2012).

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Figure 4.2, presents this dynamics wherein the system condition of rising emissions together with the rule of Kyoto Protocol along with the system condition of depletion of fossil fuel together with the rule of Security of supply is calling on the Actor, in this case the Dutch Government, to develop a framework to reduce emission and meet future energy demands via its Climate and Energy policy.

Figure 4.2: Develop a framework to reduce emissions and increase security of supply

Under the SDE/SDE+, generators of renewable energy must sell all generated electricity to the grid at market prices. On top of these prices, producers also receive a subsidy or “bonus” payment, up to a maximum predetermined price per kWh of green power, per m3 of green gas and per GJ of green heat, which means that energy producers are ensured a minimum income. The awarded financial support is granted over a period of 15 years maximum; the subsidy amount stays stable during this timeframe (EZ 2011, Nortonrose 2013).

Besides price regulation through the SDE-Programme, alternative energy projects in the Netherlands are also supported by subsidies through the EOS-Programme (Besluit EOS: demo en transitie-experimenten - Order on the Allocation of Grants). The EOS-Programme came into force in 2004 (Brinkhorst 2004). It provides subsidies for research, development and market research projects in the field of renewable energy sources with a maximum grant being 40% of the total investment (Hahn, Rutz et al. 2010).

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Apart from the SDE+ and EOS support, the Dutch government has identified nine Top Sectors which they plan to strengthen with the help of Dutch businesses and education & research (EZ 2011). The nine top sectors are: High Tech Materials & Systems, Agro-Food, Water, Energy, Horticulture, Chemicals, Creative Industries, Logistics and Life Sciences (CBS 2012). Approximately 1,5 billion euro has been made available to support these Top Sectors. Apart from targeted investments the government is also focused on identifying and solving bottle-necks impeding the growth of these sectors such as bothersome rules or lack of qualified personnel (EZ 2011).

Figure 4.3, presents this dynamics wherein the system condition (described as rising emissions and depletion of fossil fuels) together with the rule of the Dutch Climate and Energy Policy is calling on the Actor, in this case the Dutch Government, to develop instruments to meet the 2020 Kyoto targets. The result is three rules that aim at creating drivers to invest in renewables and improve the diffusion of renewables. These three rules are SDE+ feed-in mechanism, EOS transition support and TOP Sector funding for R&D.

Figure 4.3: Develop instruments to meet 2020 targets

These three rules that are established to improve the diffusion of renewables, aim at creating external pressures on various actors in developing excess Hydrogen capacity assets. Hydrogen production assets can be of three kinds – green hydrogen, black hydrogen and CO2 neutral hydrogen. Green hydrogen will be produced by electrolysis, through the employment of renewable power for electrolysis of water. Black hydrogen will be produced from coal gasification or steam methane reforming, accompanied by CCS (Carbon Capture and Sequestration). CO2 neutral hydrogen will be produced by converting nuclear power into hydrogen via electrolysis of water.

Following section discusses the development of these assets.

Q 1A1. Can we build new green (solar and wind) power capacity?

SDE+ feed-in tariff guarantee minimum payments, at an agreed rate per kWh of green power, thus making investments in green power a safe bet.

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Figure 4.4, presents this dynamics wherein the system condition of investment in green power as a safe bet together with the SDE+ rule has created drivers for the Actor, in this case the Energy Sector, to install green power capacity.

Figure 4.4: Install Green Power Assets

SDE+ has created incentives for actors to invest in green power. When actors invest in any assets, they are bound by the primary rule of Cost Recovery (Cardone and Fonseca 2003, Unnerstall 2007). Along similar lines once actors invest in green power assets, they would like the operating capacity of their asset as high as possible (Mehta and Pathak 1998). The effective operating capacity for each energy producing asset is managed by the Rule of the Merit-Order in Netherlands.

The “merit order,” i.e. the order in which power generation sources are ranked as based on the variable costs of electricity production, plays a major role in the order in which different supply options are employed to meet demand (Frontier 2011). The fuel prices and the CO2 price are the most important factors that determine the variable costs of Green power (for example Wind Power), gas and coal-fired power generation, and as such also their position in the merit order (Morthost, Ray et al. 2010, Méray 2011). Based on these costs, wind power – when available – will find a place in the market sooner than fossil fuel-based power, due to its low variable costs. It thus replaces either gas- or coal fired electricity, depending on their positions in the merit order. In both cases it will reduce CO2 emissions, but the level of reduction will differ significantly, depending on which fossil fuel it replaces.

For example, when wind is available the variable cost of operation is almost zero, additionally there are no emissions. The volume of CO2 thus saved by wind power is the CO2 otherwise emitted by a gas-fired plant. Gas-fired plants are at least twice as CO2 efficient as coal fired plants. If the positions of variable costs of gas and coal-fired power in the merit order were reversed, as would be the case under higher CO2 prices, coal-fired power would sooner be replaced by wind power than gas-fired power. From a CO2 reduction perspective, replacing coal-fired power is far more effective than replacing gas-fired power. However, in current market economies with a mix of coal and gas-

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) fired power plants, in which the penalty for CO2 emission is low or non-existent, wind power will in most cases sooner replace gas-fired power, as the variable costs of gas-fired power are usually higher than those of coal (Clingendael 2004).

Figure 4.5, presents this dynamics wherein the system condition of increasing emissions together with the rule of the Dutch Climate and Energy Policy, along with the system condition of return on investment together with the rule of Cost Recovery is putting pressure on the Actor, in this case the Energy Sector, to develop a Merit order that would aim at reducing emissions and optimize cost recovery.

Figure 4.5: Develop a framework to reduce emissions and optimise cost recovery

In view of the rising emissions, there is a need to identify and begin use of alternative fuels to power our lives. Along these lines, politicians worldwide have agreed on ambitious CO2 emission reduction targets. The most notable of such international agreements are the Rio Conference (Earth Summit) and the Kyoto Protocol of the United Nations Framework Convention on Climate Change that strengthens the international response to climate change (UNFCCC 1997). The European Union (EU) and its Member States ratified the Kyoto Protocol in late May 2002. In line with this agreement many international, national and city governments have formulated strategies to meet the Kyoto objectives (EC 2002). The EU target is 20% reduction of emissions by 2020, when compared to 1990 (EC 2002).

At European Union level, one of the main instruments is the Emission Trading Scheme (ETS) (EU 2013). The ETS sets a European ceiling for permitted carbon emissions. This ceiling determines the maximum level of CO 2 emission rights that may be in circulation within the EU, and therefore the permitted combined emissions of all participants. Companies can receive emission rights in an open auction process. In accordance with these rights, companies have to restrict their emissions within the limits, if not they pay heavy fines (Brown, Hanafi et al. 2012). Thus, the European Union has created a framework that puts a price on emissions, which creates disincentives for pollution. Thus indirectly creating incentives for actors to invest in renewable energy technologies to reduce their emissions.

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The EU ETS works under the 'cap and trade' principle, a cap is set on the total amount of greenhouse gases that can be emitted by all participating installations. 'Allowances' for emissions are then auctioned off or allocated for free, and can subsequently be traded. Installations must monitor and report their CO 2 emissions, ensuring they have enough allowances to cover their emissions. If emission exceeds what is permitted by its allowances, an installation must purchase allowances from others. Conversely, if an installation has performed well at reducing its emissions, it can sell its leftover credits. This allows the system to find the most cost-effective ways of reducing emissions without significant government intervention. If any installation fails to balance its limits and emissions, they have to pay hefty fines (Ellerman and Buchner 2007, EU 2013).

Figure 4.6, presents this dynamics wherein the system condition of rising emissions together with the rule of the Kyoto Protocol is calling on the Actor, in this case the European Union, to create a framework to reduce emissions. One of the primary rules that has been devised by the EU is the ETS framework that has put a price on CO2 emissions.

Figure 4.6: Develop a framework to reduce emissions in EU

Q 1A2. Can we supply this green power to the grid

Wind and Solar power is associated with fluctuations – that can be the difference between day and night, or seasonal, or in fact from minute to minute. These fluctuations need to be balanced by the utility or network operator for safe operation of the grid (Sassnick, Luther et al. 2004). Balancing is actually a two-fold process – there should be a solution in place to take care of energy troughs (when there is no supply of green energy), and other to take care of energy peaks (excess energy).

Fluctuations lead to grid imbalances leading to reliability and availability issues. Given the drivers at European Union and Dutch level, discussed below, to increase the share of renewable energy sources, and wind being the most important renewable energy source in the Netherlands, large investment in wind-energy in the near future to meet 2020 targets is inevitable. Utilities or grid operators have to find ways to deal with the fluctuations accompanying wind (Gasunie 2011,

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EC 2013). Peak power could be stored, to be used later or in other form to produce a value added product.

Secondly, the other part of grid balancing is to ensure security of supply when the wind does not blow or the sun does not shine. Green power, especially wind, have a low capacity factor. This means that wind power does not significantly replace other generating capacity (Komanoff 2009, Gasunie 2011). Auxiliary power must be present for almost 100% of the installed wind capacity to ensure that there is sufficient back-up (security of supply) to meet market demand at times of reduced wind power supply (IEA 2005, Méray 2011). Most of this will have to come from fossil power plants, as renewables such as solar power is associated with day and night fluctuations and power from biomass is constrained due to logistics and transport issues. To guarantee 100% security of supply, fossil fuel plants are the best bet. Wind capacity will thus essentially be “surplus” to the necessary dispatchable system capacity, and thus costs of investment in wind power capacity will essentially come on top of the costs of investment in base fossil power plant capacity (Méray 2011). Extra costs of investment in wind power assets have to come from other incentives programs. We would like to bring to the reader’s attention the fact that this is a very simplified assumption of the Dutch energy sector. In reality cross-border interconnection in Europe is currently present, which could help solve the problem of variability and unpredictability of wind power to some extent. Furthermore, EU advocates more cross-border integration so that variable power supply and demand can be better balanced across the system. Overtime when more interconnection capacity becomes available, we will have better access to cross-border storage facilities (for example: access to storage capacities in Norway by pumping water to hydro reservoirs) and better access to cross-border flexible demand.

Figure 4.7, presents this dynamics wherein the system condition of grid imbalance together with the rules of Security of supply and Safety are calling on the Actor, in this case the Energy Sector, to install auxiliary power capacity that can be turned on and off as and when required to balance green power fluctuations.

Figure 4.7: Install Auxiliary Power capacity assets

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Q 1A3. Can we convert this green power into hydrogen?

Hydrogen can provide storage options for intermittent renewable technologies such as solar and wind, to store their peaks. The concept of the hydrogen economy centers on a closely connected action of two carriers – hydrogen and electricity. Both can be used interchangeably to produce the other (Hemmes, Patil et al. 2004, Hemmes, Patil et al. 2005). Converting green power into hydrogen allows for maximum production of green power, as it is not determined by supply and demand and not further constrained by the system condition of grid balancing. When there is wind or sun, that energy can be converted into green power if there is demand for power or not. If there is demand such green power could be fed to the grid and if there is no demand for power this green power can be used to produce green hydrogen. This allows investors to optimize their return on investment.

The idea of combining wind power with other industrial sectors is not completely strange. E.ON is building a pilot plant in Falkenhagen, Germany, to convert excess wind power into hydrogen by electrolysis. The hydrogen will be carried via pipeline to a connection point on the natural gas grid, where it would be methanised in combination with CO2 and then fed into a high-pressure German gas transmission pipeline (Folke 2012, Keussen 2012). RWE, Bayer and Siemens join forces in the Co2rrect-project to produce chemicals based on wind-based hydrogen (Wang, Kowal et al. 2012). Proton Ventures, Netherlands has developed a skid-based Wind2Ammonia unit, capable of storing fluctuating renewable energy in the form of ammonia (a hydrogen vector) (Vrijenhoef 2011, Patil 2012).

Figure 4.8, presents this dynamics wherein the system condition that investment in green power is a safe bet together with the rule of SDE+, along with the system condition of return on investments together with the rule of Cost Recovery are calling on the Actor, in this case the Energy Sector, to invest in alternate power to hydrogen technologies.

Figure 4.8: Invest in Power to Hydrogen Production Assets

The Dutch government through its energy and climate policies support new pilot projects for experimentation with alternative fuels and new ways of emission reductions. These supports are

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) granted through the rule of EOS and TOP sector mechanisms (Brinkhorst 2004, EZ 2011). These rules are activated as the system condition shows that alternative fuel technologies are yet unproven and the impact of long term usage of these technologies yet unknown. These rules create drivers for actors to invest in pilot projects with regards to CCS and Power to Gas.

Implementation of such technologies in pilot projects helps these technologies in developing the initial bandwagon effect, where early adopters test the technology and it can be introduced to a larger audience to be proven (Raven 2005). As discussed in chapter 2, the initial bandwagon effect allows new technologies to overcome the reinforcing mechanisms of increasing returns, network externalities, high sunk costs, among others. Furthermore, there is learning and knowledge gathered once the technologies are implemented as pilot projects. This learning and knowledge feeds back for the continuous improvement of the technology (Caniels and Romijn 2008, Schot and Geels 2008). Few decades earlier, wind turbines and solar PV panels benefited through such support for pilot projects and experimentation, due to which these technologies are now better, more efficient and cheaper than before (Mierlo 2012).

This dynamics is captured in figure 4.9, wherein the system condition of unproven nature of alternative fuel technologies together with the rule of EOS and Top Sector have created drivers for the Actor, in this case the Energy Sector, to conduct experimentation of new alternative fuel technologies in the form of Pilot Projects.

Figure 4.9: Invest in Pilot projects

Q 1B1. Can we produce hydrogen from fossil fuels?

The technology to produce hydrogen from natural gas is proven and has been in existence for more than 100 years (Yang and Ogden 2007). Natural gas is reformed by steam, to release hydrogen

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) and CO2. This CO2 can be captured to be used or sequestered (Collodi and Wheeler 2010). Air Liquide is building a new hydrogen plant at its site in the Botlek area in Rotterdam. This project will supply up to 130,000 Nm3/h of hydrogen to Air Liquide’s Northwest European hydrogen network. The plant will be capture-ready, meaning that it could easily be equipped with an installation to capture up to 500kt/y of CO2 (Hurren 2011). This CO2 is delivered in particular to the greenhouse market or other industries within the Netherlands (POR 2010).

The technology to produce hydrogen from coal through coal gasification is relatively new. Coal gasification represents one of the most promising technology for large, medium and small-scale hydrogen production (Pettinau, Ferrara et al. 2009). Coal gasification allows the development of a clean hydrogen pathway if it is carried out in combination with CO2 capture and sequestration (Cormos, Starr et al. 2008, Gnanapragasam, Reddy et al. 2010). Secondly, i f hydrogen is produced in an advanced gasification coproduction facility that also generates electric power the production costs of the coproduced hydrogen can be reduced depending on the value of the power (Gray and Tomlinson 2002). A quick note: in this section we have not discussed the conversion of biomass to hydrogen as we do not see any activity in that area at this point in the Netherlands. Biomass is directly converted into biogas, which can be fed directly into the Dutch natural gas network (further discussed in our response to Q 2A5). Furthermore, biogas is eligible for SDE+ feed in tariffs. Thus making the conversion from biomass to hydrogen unnecessary and expensive.

The current Dutch energy system is primarily based on natural gas for industry and households (Gasunie 2010). Where gas is the energy carrier for space heating in households, and for industrial heat supply, and as a raw material for industrial processes. When natural gas is burnt, there are CO2 emissions. Reducing these CO2 emissions would be an effective way to meet the 2020 targets. If hydrogen is centrally produced from natural gas by steam methane reforming or coal gasification and the resulting CO2 is captured and sequestered, this hydrogen can be added to the grid as green gas and the actors involved can benefit from the minimum guaranteed feed-in tariff of the SDE+ rule (EZ 2011, Michiel Hellebrekers 2011). The difference between the costs of hydrogen production from natural gas (or coal gasification) with CCS will be off-set by the feed-in tariff and the CO2 price. The higher the CO2 price, the more attractive it is to produce hydrogen from natural gas or coal.

Figure 4.10, presents this dynamics wherein the system condition of rising emissions together with the rule of EU ETS along with the system condition that investment in Green Gas is a safe bet together with the rule of SDE+ are calling on the Actor, in this case the Energy Sector, to invest in CCS technology during the production of hydrogen from fossil fuels.

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Figure 4.10: CCS for Hydrogen Production from fossil fuels

Q 1B2. Can we obtain extra natural gas or coal to be converted into hydrogen?

The Groningen Gas field in the Netherlands is slowly nearing depletion as it has already been exploited for more than 50 years. At the same time other issues such as earthquakes in the region are creating safety issues for future exploration and gas production (Noordhuis 2013). This has put pressure on the operators, Royal Dutch Shell Plc and Exxon Mobil Corp. to cut output amid forecasts for heavier tremors. In recent years the quakes have become more frequent, about 18 in the first six weeks of this year, compared with as few as 20 each year before 2011 (Tagliabue 2013). The strength of earthquakes triggered by gas production in the region may rise to 5 on the Richter scale, according to a study released last month by the State Supervision of Mining at the Ministry of Economic Affairs (Pals 2013). Similarly exploration of shale gas in the Netherlands is currently on hold. Concerns have been raised by Dutch environmental groups, the public as well as water companies that ground water could be contaminated by fracking associated with the shale gas exploration (Koster and Griston 2013). Although, shale gas shows potential, at present all drilling is on hold and no licenses for the extraction of shale gas are issued until a formal decision has been made (Rijke and Sanden 2013).

These other issues are making it increasingly difficult for the gas field to be continually exploited over the longer term (Kamp 2013). Supply of gas is more or less the same, or maybe even reducing in the near future while the gas demand in the Netherlands would increase if excess capacity to produce hydrogen from natural gas were installed. To balance the supply and demand new fields have to be exploited or the additional gas demand has to be met by imported gas (EZ 2008). Furthermore, Coal is expected to play a large role in the Dutch and EU energy mix. Coal is broadly recognized as secure, competitive, diversified, not vulnerable and predictable in price as an energy resource (Franco and Diaz 2009). In the power generation sector, coal is playing a dominant role in the EU-27 with 25% share of the total installed capacity and almost one-third of the power generation (Kavouridis and Koukouzas 2008).

The role of coal has increased as a result of the shale gas boom in the United States. As demand for coal in the United States has decreased dramatically, coal prices have dropped to an all-time low,

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) which is one of the reasons the Netherlands is seeing a substantial increase in coal fired power generation (Anwyn 2013). The other reason is that the EU ETS for CO2 emissions is not working properly. The capacity has not been corrected for the economic crisis, so there is an abundance of

CO 2 emission rights in the market, which costs almost nothing (CDC-Climat 2012, Stonington 2012).

Figure 4.11 presents this dynamics wherein the system condition of Groningen gas (G-gas) depletion and increasing gas demand together with the rule of security of supply, along with the system condition of Safety together with earthquakes in the region on account of gas exploration has created external pressures on the Actor, in this case the Energy Sector, to invest in capacity to exploit small gas fields around Netherlands or capacity to import more gas to make up for the difference.

Figure 4.11: Install new Small field and Imported Gas/coal capacity

Q 1B3. Can we utilize the CO2 emitted during the process?

The technology to capture CO2 emitted during industrial processes and supplying it to other industrial sectors for their use is already present in the Netherlands. Since 2005, pure CO2 has been captured from a hydrogen plant at the Shell Pernis refinery, compressed by Linde Gas Benelux, and transported to the beverage industry to carbonate soft drinks (Michiel Hellebrekers 2011). Another part of the Pernis CO2 goes through the OCAP network to greenhouse farmers, where the CO2 is used as a nutrient for vegetables and flowers and a small volume of pure CO2 from Shell’s Moerdijk petro-chemical plant is sold to industrial customers (Smit 2011, TNO 2011). Organic Carbon Dioxide for Assimilation of Plants (OCAP) is a project in the Netherlands that captures industrial CO2 and supplies it to greenhouses near the Rotterdam area. By using this CO2, instead of producing their own by burning natural gas, the greenhouses and other industries save energy and eventually save on the EU ETS CO2 credits (OCAP 2012).

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Figure 4.12 presents this dynamics wherein the system condition to reduce CO2 emissions together with the rule of EU ETS has created external pressures on the Actor, in this case the Energy Sector, to invest in capacity to capture and transport CO2 produced during industrial processes to other industrial processes who need them, eventually reducing CO2 emissions to the atmosphere.

Figure 4.12: Install CO2 to transportation and distribution capacity

Q 1B4. Can we sequester the CO2 emitted during the process?

There are various activities within the Netherlands that focus on Carbon Capture and Sequestration (CCS) by usage of empty gas fields to sequester CO2. CCS is considered to be the only technology capable of directly abating CO2 emissions from both industrial facilities, such as refineries or steel plants, and fossil fuel power plants. Rotterdam offers excellent opportunities for the development of a shared CCS network (Velde and Mieog 2008). Large CO2 emitters are clustered in the area, and large offshore storage sites are accessible nearby in depleted oil and gas fields and other suitable geological formations (TNO 2011, Everaars, Kuipers et al. 2012).

The conditions described above create economies of scale and help to lower the overall cost of implementing CCS. Perhaps the most attractive benefit of a Rotterdam- based CCS network is that it would accelerate CCS deployment by providing a CO2 transport and storage infrastructure with associated facilities such as transhipment and processing. The Port of Rotterdam, in cooperation with OCAP, Gasunie and Stedin is developing the Rotterdam CO2 Common Carrier Pipeline (R3CP), a collection network for CO2 in the port (Michiel Hellebrekers 2011). Furthermore Vopak, Anthony Veder, Air Liquide and Gasunie are working together within the CINTRA-consortium to collect CO2 from various emitters in Rotterdam and transport it to depleted offshore oil and gas fields by pipeline or in liquid form by ship (Ben 2011, Tetteroo and Ben 2011).

Figure 4.13 presents this dynamics wherein the system condition to reduce CO2 emissions has created external pressures on the Actor, in this case the Energy Sector, to invest in capacity to sequester CO2 in empty gas fields.

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Figure 4.13: Install CO2 Sequestration capacity

C. Hydrogen from nuclear power can be obtained by converting power into hydrogen via electrolysis.

Q 1C1. Can we build new nuclear power capacity?

The Dutch government sees nuclear power as an important part of the energy mix (EZ 2011). Nuclear power plants produce virtually no carbon emissions and are therefore an important step in reaching the 2020 Kyoto targets. New nuclear power plants also contribute to the security of energy supply through a greater spread of technology, raw materials and supply routes, especially claiming independence from middle-eastern oil (Seebregts 2011). The building and operation of nuclear power plants also creates high-quality jobs and knowledge and provides a stimulus to nuclear research and education in the Netherlands, especially at research institutes and universities (EZ 2011).

On the other hand Nuclear power is CO2 neutral but it has a very low public approval rating, especially after the Japan earthquake and the subsequent nuclear disaster, thus affecting safety of the entire system. Obtaining public acceptance before any installation of new nuclear power plants would be a steep task and the chances are bleak (Phillips 2011, Bauerova 2013). However, nuclear power has survived long odds before: it has been both unpopular and uneconomic, never accounting for more than 5 percent of the world’s energy supply. Hence, no one knows the future of Nuclear power as of now – it might bounce back in light of a new tragedy that affects supply and demand of global energy supply (Kersten, Uekoetter et al. 2012).

Figure 4.14 presents this dynamics wherein the system condition of rising emissions together with the rule Climate and Energy Policy in the Netherlands, and the system condition of depletion of fossil fuels together with the rule of Security of Supply, and the system condition of safe operation together with the rule of Safety has created external pressures on the Actor, in this case the Energy Sector, to invest in nuclear capacity to produce CO2 neutral energy.

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Figure 4.14: Invest in Nuclear Power

Q 1C2. Can we convert nuclear power into hydrogen?

Yes, Nuclear power too can be converted into hydrogen. For this we refer you to our earlier discussion about Power to Hydrogen – response to Q 1A3.

Necessary Condition 2: Need to be able to feed hydrogen into the natural gas network and to have end-user appliances that are compatible with the hydrogen and natural gas mixture.

Mixing hydrogen should be both technically feasible and institutionally allowed. This condition can be further studied by answering the following questions:

Q 2A1. What are the technical conditions under which the natural gas network operates?

The Dutch natural gas network consists of pipelines extending over 11,000 kilometres in length for the high-pressure network (Gastransport-Services 2003), and further thousands of kilometres for low-pressure gas distribution. The pipeline diameters range from 120cm to 45 cm. The pipes are made of various grades of steel, and cathodic protection systems guard against external corrosion. Following actors are responsible to maintain the technical conditions for the safe operation of the gas network in the Netherlands - NV Nederlandse GasUnie, Gas Transport Services B.V. (GTS), Noordgastransport B.V., NOGAT B.V., Ballast Nedam - CNG Net, etc (Peter van den Berg 2012). For simplicity we term this actor as a Network Operator for the purpose of this analysis.

The Dutch gas act regulates the natural gas network within the Netherlands. The primary specifications for the gas transport network to meet are:

a) Maintaining required gas pressure throughout the network

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Located at various points in the network of pipelines are nine compressor stations: Alphen, Beverwijk, Oldeboorn, Ommen, Puth-Schinnen, Ravenstein, Spijk, Wieringermeer and Zweekhorst and eleven mixing stations: Beekse Bergen, Beverwijk, Kootstertille, Maasvlakte, Noordbroek, Ommen, Oudelandertocht, Pernis, Puth-Schinnen, Ravenstein and Wieringermeer (Gasunie 2005). The function of the compressor stations is to raise the pressure of the gas back up to the desired level when it becomes too low due to transport losses. During cold winters at times of heavy peak demand the gas has to travel at high speed through the pipelines. Since the pressure drop is proportional to the square of the velocity times the distance traveled, the pipeline pressure falls off rapidly in cold weather when gas demand is high. To ensure that sufficient gas is available for delivery to the various customers at the right pressure, it is necessary to raise the pressure again roughly every 100 km (Gasunie 2003).

b) Maintain Gas composition within certain limits

The function of the mixing stations is to mix two (or even more) different gas streams in the right proportions. The stations comprise groups of pipes several hundred meters long, plus the necessary instrumentation and valves. The quality of the gas mixture is measured by its Wobbe- index. The mixing stations have automatic control systems which are constantly monitoring the Wobbe band of the outgoing gas stream (Gasunie). Wobbe-index, as a rule, will be discussed in detail in our response to Q 2A2 below.

c) Maintain Gas quality

Natural gas is supplied by the producers at a pressure of around 70 bar. Sand, water, condensate and other contaminants are removed from the gas at the wellhead. At the high pressure of approximately 70 bar the gas is driven through the main transmission pipelines. These trunk lines carry the Groningen gas to the main parts of the country. It is obviously not practical to have large pipelines serving every small town and village. Instead the gas is transferred to a system of regional pipelines which feed the gas mains operated by the local utility operators from where onward distribution to the end-users is directed (GTS 2012).

Figure 4.15 captures this dynamics. Wherein the system requirement of safe operations of the gas network together with the rules of Wobbe and the Dutch Gas Act has created external pressures on the Actor, in this case the Network Operator, to invest in assets in order to maintain the natural gas network within certain prescribed technical conditions.

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Figure 4.15: Assets to maintain Natural Gas with required pressure, composition and quality

Q 2A2. What are the institutional conditions under which the natural gas network operates?

The Dutch Gas Act is a policy framework that governs the natural gas system in the Netherlands. Safety is the key determinant of this framework. Apart from safety of the system, the act also includes policies for security of energy supply, wherein the gas delivery to the consumers must always be safeguarded (Roggenkamp and Tempelman 2012, Verhagen 2012).

The Act specifies the pressure, temperature and composition of the gas delivered to the consumers, along with directives that govern the end-user appliances to be used with the corresponding gas quality – The Wobbe index. Wobbe is the most important parameter for the gas composition. Wobbe ensures that the gas transported through the network is compliant with the end-user appliances thus ensuring safe operation of the system (Rosal and Scipio 2009).

To overcome security of supply issues the resulting Dutch gas act allows for addition of gases other than natural gas in the natural gas network if the properties of the end gas is within acceptable limits and will ensure safe operation of the system. Apart from this, there is small field policy in place since 1974. The Gas Act stipulates that gas producers can sell gas at a certain pace, under reasonable conditions and in conformity with market prices to GasTerra (buying guarantee). In addition, Gas Transport Services (GTS) is bound to transport gas from small fields (EBN 2012). This ensures that the balance function of the Groningen field can be continued as long as possible (Peter van den Berg 2012). The above rules are intended to promote long term security of supply. At the same time to ensure emissions reduction over the long term, the Dutch gas act allows mixing of green gas into the system if it does not affect safety, this includes hydrogen percentage limited to 0.5% molar (Peter van den Berg 2012).

Figure 4.16 captures this dynamics. Wherein system condition of safe operation of the system together with the rule of Safety, and depletion of fossil fuel together with the rule of security of supply and rising emission together with the rule of Kyoto targets has created external pressures on the Actor, in this case the Dutch Government, to develop a framework that ensures safety of the

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) entire system, guarantees security of supply over the long term and aims at reducing emissions. This has resulted into the Dutch gas act.

Figure 4.16: Develop a framework to ensure safety, security of supply and reduce emissions

The Wobbe Index is used to compare the combustion energy output of different composition fuel gases in an appliance (fire, cooker etc.). If two fuels have identical Wobbe Indices then for given pressure and valve settings the energy output will also be identical (Rosal and Scipio 2009). Typically variations of up to 5% are allowed as these would not be noticeable to the consumer (Emerson 2007).

If H is the calorific value, and G the specific gravity of the Gas, then the Wobbe for the gas, W, can be defined as

H W = G

The Wobbe of the high calorific gases (H-gas), imported gas as well as small field gases, is far above the allowed values for Dutch household appliances. At present, to satisfy the G-gas boundary conditions, nitrogen is added to the H-gas, to reduce its calorific value. Maintaining the Wobbe within allowable limits ensures safe operation of the end-user appliances (Schouten, Michels et al. 2004). As the Dutch gas reserves, especially the Groningen gas field, begin to run out and more gas from other regions is traded via the Netherlands, the composition of the gas in the Dutch network will change. This has consequences for all gas users, both large industrial consumers and households. The Dutch government is taking steps to facilitate the transition to a new gas composition. Table 4.1 specifies the new Wobbe and gas composition until and after 2021 (Peter van den Berg 2012).

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Table 4.1: Changes in Dutch Gas Composition, from 2021 or later Current Composition Future Composition (2021 or later) 1. Wobbe Index at 43.46 – 44.41 MJ/m3 43.46 – 45.3 MJ/m3 0 deg C 2. H2 content Not specified < 0.5% molar

The current bandwidth for the Wobbe index will continue to apply for as long as it is necessary for consumer safety, but at least until 2021. This extends from 43.46 to 44.41 MJ/m3 and is specified by means of a Ministerial Decree (GTS 2009). Gas Transport Services (GTS) will incur costs for this which are incorporated in the transportation charges. The costs particularly relate to the addition of nitrogen, which converts high calorific gas into low calorific (G) gas. As soon as the consumers’ appliance population can cope with it, the upper limit of the Wobbe index can be raised to 45.3 MJ/m3 (Peter van den Berg 2012). Such a higher Wobbe index will mean that GTS will have reduced processing costs, due to reduction of treating the high calorific gas with nitrogen ballasting to reduce its calorific value, and make the Dutch network and gas quality equivalent to its neighbors allowing for easier gas transport and exchange.

This dynamics is captured in figure 4.17, wherein the system condition of continued safe operation together with the rule of the Dutch Gas Act has created external pressures on the Actor, in this case the Energy Sector, to specify a Wobbe band, which network operator and end-use appliance makers have to conform to for safe operation of the system.

Figure 4.17: Develop a framework for safe operation

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Q 2A3 What are the technical conditions under which hydrogen can be fed into the natural gas network?

VG2 partners at the Delft University of Technology performed extensive research on the interaction of hydrogen with the transport infrastructure. Below we summarize the results of this research as relevant to this case study.

This research suggests that up to 5% hydrogen by volume can be mixed and transported through the natural gas network (Neeft, Schut et al. 2007, Patil, Levinsky et al. 2008). Hydrogen diffuses through the walls of the pipelines, but the total flux (loss) through the pipe is negligible for 5% or less hydrogen by volume in natural gas. Hydrogen leakage through rubber seals is negligible. In household/industrial situations it is not easy to generalize at this point, but is not expected to be large at such low concentrations of hydrogen.

Whereas the expected problems of condensate formation and hydrogen leakage can be ruled out by our research for less than 5% H2 in Natural gas, the mechanical integrity of the pipeline network under exposure to hydrogen cannot be guaranteed. The phenomenon of enhanced crack growth under exposure to hydrogen may eventually cause the demolishment of the grid. VG2 research has generated some insight into the mechanism of enhanced growth of (minute) cracks under hydrogen exposure, which appears to be related to the trapping of (interstitially dissolved) hydrogen in defects that are generated at the crack tip. The trapping of gas by defects reduces the mobility of the defects and thus the possibility for their removal by diffusion of defects. On the basis of VG2 research a method was proposed to reduce the dissociative adsorption of hydrogen by iron in order to decrease the trapping probability, but still the mechanism of enhanced crack growth is not fully understood and more research is needed to obtain guarantees for the mechanical integrity of the gas grid (Schouten, Janssen-van Rosmalen et al. 2005, Neeft, Schut et al. 2007). Above results indicate that for hydrogen percentage less than 5% leakage and condensation problems within natural gas pipelines should not cause any safety hazards, but the same cannot be said of the long term integrity of the pipeline as addition of hydrogen might cause pipe embrittlement and hence cause safety hazards over longer time (Patil, Levinsky et al. 2008).

This dynamics is captured in figure 4.18, wherein the system condition of hydrogen leakage and long term integrity of the pipeline together with the rule of Safety and the system condition of reliable operations together with the rule of guarantees/liabilities/insurances have created external pressures on the Actor, in this case the Energy Sector, to install hydrogen ready pipeline before hydrogen can be fed into the natural gas network.

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Figure 4.18: Install Hydrogen ready pipeline

Q 2A4 What are the institutional conditions under which hydrogen can be fed into the natural gas network?

The Dutch Wobbe band has the potential to bring about the transition towards hydrogen in the Netherlands over the longer term. Generally speaking, in the Netherlands two types of gases are in use: G-gas is a low calorific gas produced in Groningen, in the north of the Netherlands, and H-gas is a high calorific gas that is either imported or produced in small fields around the Netherlands. The Wobbe band adopted in the Netherlands is very narrow and relatively low as it is heavily biased towards G-gas. Diminishing reserves of G-gas – and the resulting increasing reliance on H-gas – has necessitated the mixing of nitrogen with natural gas to comply with the required Wobbe band for domestic use of gas in the Netherlands (Schouten, Janssen-van Rosmalen et al. 2006, Wit, Hemmes et al. 2007). Currently, the maximum content of hydrogen allowed in the natural gas is 0.5% (Peter van den Berg 2012).

This dynamics is captured in figure 4.19, wherein the system condition of safe operations together with the rule of Wobbe, and depletion of G-gas together with the rule of the Dutch Gas Act has created external pressures on the Actor, in this case the Energy Sector, to allow for feed-in of green gases such as hydrogen in the gas network.

Figure 4.19: Allow mixing hydrogen to Dutch natural gas

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The Dutch Wobbe standard has created a ‘back-door’ for moving towards hydrogen – as hydrogen (which has lower calorific value than natural gas) may be substituted in part for nitrogen during the process of creation of G-gas, thereby reducing NOx emissions and CO2 emissions at the point of usage. The Dutch gas network is an integrated network, wherein hydrogen introduced at some point can potentially reach all corners of the network. This implies that the entire hydrogen pipeline and ancillary system must be hydrogen-ready. However, as long term experiments have not been conducted, it is difficult to determine the long term integrity of the old natural gas pipeline in the presence of hydrogen.

There should be actors, within the energy sector, who should be responsible for the safe operation of the system once hydrogen is fed in. There should be sufficient guarantees in place that should cover the losses if any safety-related incident takes place. The primary aim of the Dutch gas act is the safety of the system, and it regulates that certain guarantees, liabilities and insurances are in place before hydrogen is fed in (Roggenkamp and Tempelman 2012, Verhagen 2012).

This dynamics is captured in figure 4.20, wherein the system condition of safe operations of the system together with the rule of the Dutch Gas Act have created external pressures on the Actor, in this case the Energy Sector, to ensure the proper functioning of the pipeline – this includes ensuring that proper guarantees and insurances are in place and there is an entity who takes responsibility for the liabilities if any.

Figure 4.20: Develop Rules for guarantees, liabilities and insurance for pipeline operations

Q 2A5. Is there a precedence of other gases being allowed to be mixed into the natural gas network

Mixing alternative gases with natural gas is not new to the Netherlands – for example for quite some time biogas was fed into low-pressure natural gas distribution pipelines in the Netherlands (Persson, Jonsson et al. 2007). However, Gasunie has recently signed agreements with local parties in the region of Overijssel to produce biogas on a larger scale that will be fed into the high-pressure

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) pipelines of the Dutch natural gas system (Dumont 2009). It will be the first time that biogas has been fed directly into the national gas transmission grid, and it represents a key step in making the Dutch natural gas system more sustainable. Until now, biogas has only been used locally in small quantities (Gasunie 2009). For the year 2010, around 214 million euro subsidies are available for the Bio-based gas industry. Subsidies available for biogas has given a big push to the biogas industry (Wempe and Dumont 2011). After biogas, mixing hydrogen with natural gas seems a logical choice.

The Dutch Gas Act has some flexibility built into it – it explicitly has a clause that allows for the provision and supply of gases other than natural gas, if their properties are similar to methane. But the properties of these other gases should be similar to that of natural gas (EZ 2000). Furthermore, the EU gas directive (2003/55/EC) directs the Member States to open the existing natural gas network for gases other than natural gas, provided the new gas is compatible with relevant technical rules and safety standards (EC 2003). The Dutch Gas act obliges actors such as the Gas Transport Services (GTS) in the Netherlands to accept gases other than natural gas in the network, if they do not have any detrimental effects on the operation of the system (Verhagen 2012).

The rule of the Dutch Wobbe has played an important part in enabling the biogas niche to take- off in the Netherlands (Patil 2010). Upgrading the biogas gas involves a large investment in purification. As discussed during this research, the established Dutch natural gas system is tailored towards a Wobbe band that is biased towards the low-calorific Groningen gas. Due to this, biogas (which is originally a low-calorific gas) is not required to be upgraded to a high-calorific gas before it can be mixed with the natural gas (Dumont 2009, Wempe and Dumont 2011). This requirement may have reduced the operation costs and improved the economic feasibility of this niche, as the biogas cleaning and upgrading costs are reduced, thus helping the niche to take-off (Persson, Jonsson et al. 2007, IEA 2009). The Dutch Wobbe rule may have created a ‘back-door’ for moving towards biogas in the Netherlands, thus supporting our findings. This combined with properly timed subsidies (feed-in tariff) has given a big fillip to the biogas industry.

Before being able to be fed into the national natural gas grid, the biogas niche started at the local level. In fact as a solution to a local problem – wastes, especially manure, from the local animal farming industry. The local animal farming industry was facing big problems over the waste and would have incurred losses due to stricter environmental regulations (Raven and Geels 2010). On time innovation and investments to convert bio waste into valuable gas, helped the farmers turn into bio gas producers (Raven and Verbong 2004). Eventually more and more actors began to produce biogas, thus putting pressures on policy makers to identify it as green gas. Once policy makers announced support to green gas through the Dutch SDE(+) program, this allowed the actors to make additional revenue for the gas they produce (AgentschapNL 2012). Thus animal farmers became gas producers. As can be seen in this example, dynamics in another system (Agriculture industry) created incentives for biogas to be added to the natural gas network as a green gas, and turn a potential problem into a win-win situation.

Biogas or ‘new’ gases, such as hydrogen, with lower calorific value are a good choice to be mixed into the Dutch NG network – as the existing Wobbe rule is based on G-gas from the Groningen field,

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) which has low calorific value (Hardi and Latta 2009). As discussed earlier these new gases are required to satisfy existing technical and safety requirements. Biogas can comply with these requirements as its properties are similar to methane – but hydrogen which is drastically different will have a difficult time satisfying these requirements. The solution could be to methanize this hydrogen and then add it to the natural gas (Keussen 2012). Methanation is a physicochemical process to generate methane from a mixture of various gases out of biomass fermentation or thermo-chemical gasification. This process is used for the generation of synthetic natural gas substitute, which can be fed into the gas grid. E.ON’s pilot plant in Falkenhagen, Germany follows this principle of feeding in synthetic natural gas (methanised hydrogen) into the German gas grids as the properties of natural gas and synthetic natural gas are almost same (Folke 2012).

This dynamics is captured in figure 4.21, wherein the system condition of investment in green gas asset is safe together with the rule of SDE+, and depletion of fossil fuels together with the rule of Security of Supply, and safe operation of the system together with the rule of Wobbe has created external pressures on the Actor, in this case the Energy Sector, to install Biogas capacity and allow for feed-in of green gases (Biogas) in the gas network.

Figure 4.21: Install Biogas Assets

Q3: Need to have end-user appliances that are compatible with hydrogen and natural gas mixture?

Usage of hydrogen and natural gas mixture will require appliances that are hydrogen-ready. This condition can be further studied by answering the following questions:

Q 3A1. What are the technical conditions under which the end-user appliances operate?

Most end-use equipment for natural gas in the Netherlands is installed and adjusted taking into account the composition of G-gas (Groningen Gas) and the corresponding boundaries for the gas quality (Wobbe standard, calorific value). For the G-gas segment, the Wobbe standard ( W) must

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) have a value between 43.4 and 44.4 MJ/m 3. Other values may lead to incomplete combustion (CO, soot), will extinguish the flame, or overheat the equipment (Levinsky 2004, Slim, Darmeveil et al. 2006).

For the past 40 years, most of the natural gas in the Netherlands came from the huge Groningen gas (G-gas) field in the north of the Netherlands. This gas has a characteristic composition, containing about 14% nitrogen. As a consequence both the calorific value and the Wobbe are relatively low, compared to many of the gases used internationally. As the Groningen gas field is depleting, other sources are needed to supplement the dwindling G-gas supply (Verhagen 2012). For this purpose G-gas from smaller fields, H-gas from (relatively small) onshore and offshore gas fields and imported natural gas are either blended together (high calorific gases with low calorific gases) or ballasted with nitrogen to yield “pseudo-G-gas” (Schouten, Janssen-van Rosmalen et al. 2006). The end-user appliances are compatible with the G-gas quality gas. There is a one-to-one correlation between Wobbe and the Gas burners, as the supply of air for combustion is tuned to the calorific value of G-gas. If the Wobbe changes beyond the allowable limits, all gas burners have to be changed as their safe operation would be jeopardized (Slim, Darmeveil et al. 2006).

Figure 4.22 captures this dynamics. Wherein the system requirement of safe operations of the gas appliance together with the rule of the Dutch gas act has created external pressures on the Actor, in this case the Energy Sector, to invest in end-user appliances that are compatible with the G- gas quality and composition.

Figure 4.22: Invest in burners compatible with G-gas quality and composition

Q 3A2. What are the institutional conditions under which the end-user appliances operate?

Apart from the Wobbe rule all end-user appliances should be CE certified to ensure safety of the system operation (EC 2011). Wobbe specifies the calorific value of the gas, but there is more to that for gas combustion. For example, around 14% hydrogen in natural gas by volume might satisfy conditions laid down by Wobbe, but at the same time more than 5-6% hydrogen in natural gas might increase the chances of burner flashback (Levinsky 2004, Patil, Levinsky et al. 2008). Hence to

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) safeguard end-user equipment against drastic gas composition changes all end-user appliances are certified to be used with a certain specified gas composition.

This dynamics is captured in figure 4.23, wherein the system condition of requirement of safe operation of end-use appliances together with the rules of Wobbe along with the rule of CE certification has created external pressures on the Actor, in this case the Energy Sector, to install Wobbe compliant burners.

Figure 4.23: Invest in Wobbe compliant burners

Q 3A3 What are the technical conditions under which hydrogen can be burnt by the end-user appliances?

Existing burners restrict the hydrogen percentage in natural gas to less than 5%, while at the same time complying with Wobbe (Levinsky 2004). If the hydrogen percentage has to be increased new burners, such as ceramic burners that are flashback resistant, have to be installed. In the framework of the VG2, new ceramic foam burners were developed and tested. These were shown to be able to handle high percentages of hydrogen, up to 70%, without the dreaded phenomenon of flame flashback and within acceptable limits of NO x emissions (less than 25 ppm) (Patil, Levinsky et al. 2008).

Flash-back is caused by changes in the burning velocity of the gas-air mixture, the velocity with which the flame propagates against the flow of gas exiting the burner. Adding hydrogen to natural gas will yield burning velocities that are higher than those encountered with the entire range of natural gases, and thus will increase the risk of flashback outside the normal range. The results for the Dutch domestic band (G-gas) are shown in Figure 4.24 (Note: the Wobbe standard given here is the resultant Wobbe after mixing with hydrogen). We remark here that this is necessarily a conservative estimate. These results do not imply that all burners will automatically flash-back at

6% H 2, but rather that 5% is the fraction that guarantees that an appliance that is adjusted to perform within the distribution band will suffer no deleterious effects (Patil, Levinsky et al. 2008).

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Increasing the percentage above this value would require local inspection (and possibly adjustment) of all appliances to receive hydrogen to provide the necessary guarantee.

Maximum allowable H2 in NG 6 5 4 3 2 1 % H2 in % natural in H2 gas 0 43.2 43.4 43.6 43.8 44 44.2 44.4 44.6 Wobbe index (MJ/m3)

Figure 4.24: Maximum percent of H 2 permitted in natural gas as function of Wobbe standard of the gas-hydrogen mixture (figure source: (Patil, Levinsky et al. 2008)).

This dynamics is captured in figure 4.25, wherein the system condition of burner flashback together with the rule of Safety, and the system condition of reliable operations together with the rule of guarantees/liabilities/insurances have created external pressures on the Actor, in this case the Energy Sector, to install Flashback resistant burners that are safe to operate with certain percentage of hydrogen in natural gas.

Figure 4.25: Install Flashback resistant and hydrogen compatible burners

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Q 3A4 What are the institutional conditions under which hydrogen can be burnt by the end-user appliances?

Hydrogen addition lowers the calorific value of the blend, and a mixture with H-gas could comply with the Wobbe/calorific requirements of household appliances. However, satisfying the requirements for Wobbe standard and calorific value, while necessary for supplying domestic appliances, are insufficient to guarantee their safe performance: since the combustion characteristics of hydrogen differ greatly from natural gas. Any gas supplied to households has to comply with the Wobbe requirements in order to ensure safety, but complying with the Wobbe requirement is not the only thing that is important here. It is just one of the parameters ensuring safety; there are other parameters equally important.

Rules regarding safety and reliability regulations are of primary importance (Verhagen 2012). As the long term integrity of the system during the addition of hydrogen is yet unknown, safety regulations and corresponding warranties constrain the transition. All warranties and CE certificates for safety and fitness-for-purpose of the gas using appliances, in households and small industries, are based on G-gas specifications. These approval certificates and warranties of gas appliances, turbines and OEM’s may be void if hydrogen is introduced in the gas composition (EC 2011). Furthermore, insurance contracts are directly tied to the gas composition, and without knowing in-depth safety and security issues regarding hydrogen usage, it is difficult to convince insurers and OEM’s to come onboard. A significant change in gas composition such as adding hydrogen poses a liability problem that needs to be solved prior to embarking on hydrogen mixing into the grid. The safety and reliability regulations are enforced via the Dutch Gas Act.

This dynamics is captured in figure 4.26, wherein the system condition of safe operation of the end-user appliances together with the rule of the Dutch Gas Act have created external pressures on the Actor, in this case the Energy Sector, to ensure the proper functioning of the system – this includes ensuring that proper guarantees and insurances are in place and there is an entity who takes responsibility for the liabilities.

Figure 4.26: Develop Rules for Guarantees, liabilities and insurances for Burners

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Results

Figure 4.27 gives an overview of the necessary condition for the transition towards hydrogen via the natural gas network in the Netherlands, where hydrogen is mixed with natural gas and transported via the natural gas network. The two necessary conditions required for this transition are:

Necessary condition 1: We need to have excess hydrogen capacity in place, then

Necessary condition 2: Need to be able to feed hydrogen into the existing natural gas network and to have end-user appliances that are compatible with the hydrogen and natural gas mixture.

Figure 4.27: Overview of the necessary conditions for the Transition towards Hydrogen via the Natural gas network.

Our analysis shows that the necessary conditions are not met as of yet, and once we meet the necessary conditions we may have a transition towards mixing and transporting hydrogen via the natural gas network. Satisfying these necessary conditions is a pre-requisite for this transition but just meeting the above necessary conditions does not guarantee a transition towards mixing and transporting hydrogen via the natural gas network as the system may exhibit complexity and transition towards another unanticipated end-state. Below, we will address the questions posed in chapter 1; which are the functional requirements of our analytical framework to garner the insights obtained by applying our framework to analyse this transition.

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AND/OR Diagrams presenting all the assets

We start by opening up the first necessary condition box – of creating excess hydrogen capacity. Figure 4.28 gives an overview of the assets required for creating excess hydrogen capacity. The assets are presented as an “AND” “OR” diagram, where the necessary conditions are shown as AND , and the alternate conditions are shown as OR . OR implies that either lower level assets may be established for higher level assets to occur, and AND implies that both lower level assets must be established for higher level assets to occur.

As seen from the figure hydrogen production can be carried out in three ways: black hydrogen, nuclear hydrogen and green hydrogen. Furthermore, while producing black hydrogen, the captured CO2 can either be sequestered or supplied to industry.

Figure 4.28: AND/OR diagram for the first necessary condition of excess hydrogen capacity

Furthermore, we open the next box of the second necessary condition for transition – to feed hydrogen into the natural gas network and have hydrogen compatible end-user appliances. Figure 4.29 gives an AND/OR diagram for this second necessary condition. As we can see, maintaining natural gas within allowable conditions along with the hydrogen ready pipeline are both necessary

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) conditions for transporting hydrogen. Secondly, we can burn hydrogen and natural gas mixtures in two different ways, hence it can be said that the transition can be carried out either by keeping the existing Wobbe compliant burners or changing them to new flashback resistant burners.

Figure 4.29: AND/OR diagram for the second necessary condition.

As discussed in chapter 3, a rule can be identified as being a crucial rule for transition if it drives a crucial process. If for any necessary condition we see only required asset(s) and no alternative asset(s), then we identify that asset as a crucial asset and the process driving the establishment of that asset as a crucial process.

For this case we have identified two different necessary conditions: to have excess hydrogen capacity (as presented in figure 4.28) and to feed hydrogen into the existing natural gas grid (as presented in figure 4.29). For the first necessary condition we have identified three distinct ways of producing hydrogen. However, for the second necessary condition, we see that both assets “maintain NG within allowable condition” along with “hydrogen ready pipeline” are required to be present to “feed and use H2+NG mix.” According to our case analysis the primary rule governing the process (operation) of this natural gas pipeline network is the Wobbe rule. Hence for this case we have identified Wobbe as a crucial rule that influences this transition. The end-user appliances

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(burners) correspond with the Wobbe-index. If Wobbe changes beyond certain allowable limits, burners have to change. This can be explained in form of the techno-institutional lock-in and associated sunk costs as discussed in chapter 2, which ensures the perpetuity of the existing system structures. Wobbe constrains and restricts changes in burners and burners restrict changes in Wobbe. Fortunately, for this case the existing Wobbe favors lower calorific value gases such as hydrogen as the existing Wobbe allows until 14% hydrogen in natural gas.

Over the longer term, Wobbe-index has the potential to bring about the transition towards hydrogen in the Netherlands, as it is relatively low and heavily biased towards lower calorific value gases. Keeping the current Wobbe as it is, is good for the feeding-in of hydrogen, and also other renewables such as biogas, in natural gas. As these alternative gases are low in calorific value, they substitute addition of nitrogen to H-gas to reduce the ensuing Wobbe of H-gas to G-gas levels. The existing Wobbe has played an important part in enabling the biogas niche to take-off in the Netherlands. Upgrading the biogas gas involves a large investment in purification. Biogas (which is originally a low-calorific gas) is not required to be upgraded to a high-calorific gas before it can be mixed with the natural gas. This requirement may have reduced the operation costs and improved the economic feasibility of this niche, as the biogas cleaning and upgrading costs are reduced, thus helping the niche to take-off (Persson, Jonsson et al. 2007, IEA 2009).

System configuration along with the relevant structures

Now we will address our second question about identifying the structures we need during transition and which actors would develop these structures. To do this we will plot the system configurations along with all the relevant structures for transition.

1. System configuration for the first necessary condition

Figure 4.30 gives an overview of the structures required for green hydrogen. The required assets for this necessary condition are displayed in the middle, flanked by rules on either or both side. Here we take a transitive relation, where the direction of the arrow indicates that the first structure was influential in driving or shaping the development of the second structure. Each arrow is a transitional arrow, gathered from our case analysis. The direction of the arrows is collected from our case analysis, and signifies what rule has shaped the development of what structure (either rule or asset), and the number of the arrow refers to the figure of the analysis from which it was collected. Bolded (boundaries for) boxes in the diagram presents the assets and normal boundaries presents the rules to be established for transition. Assets are not presented in any order, they are presented in a way to minimize crossing edges of arrows and minimize edge lengths. On the other hand, to make the distinction between rules easier, herein landscape rules are indicated by a dark grey background and regime rules are indicated by light grey background.

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Figure 4.30: System configuration for green hydrogen

Figure 4.31 and 4.32 illustrates the system configuration for the production of black and CO2 neutral hydrogen respectively.

Figure 4.31: System configuration for black hydrogen.

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Figure 4.32: System configuration for hydrogen from nuclear power

2. System configuration for the second necessary condition

Figure 4.33 presents the overview of the structures required for the second necessary condition of transporting and burning hydrogen and natural gas mixtures. This can be realized in two different ways, either the existing Wobbe compliant burners are retained or else they are replaced by new flashback resistant burners.

Figure 4.33: System configuration for transporting and burning hydrogen and natural gas mixture.

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From our analysis we see that hydrogen can be produced in three different ways, furthermore CO2 produced from black hydrogen (one of the hydrogen production pathways) can be sequestered in two different ways and finally we can burn hydrogen and natural gas mixture in two different ways. This gives us primarily eight different system configurations for the desired end-state. To make it further clear, these system configurations may not have to be mutually exclusive. As seen from our AND/OR diagram (figure 4.29) there are structures such as “maintain NG within allowable condition” along with “hydrogen ready pipeline” will play a role in all transition paths.

Discussion

In this section we will discuss the potential transition paths for this case. The notion of transition paths entails time , wherein the sequence of establishment of structures is relevant. As conceptualized in this thesis, a transition path is a sequence of structural changes during a transition. Such structural changes could be either investment in assets or bringing about changes in rules. It is an underlying TranScript assumption that no structures are changed or new ones are created unless an actor acts. This implies that actors should have incentives to bring about these structural changes.

So far, for this case, we have the system configuration diagrams giving us information about the structures that need to be established. This, along with potential sequence of structures, gives us a transition path. TranScript, as it facilitates in generating AND/OR diagrams and system configurations of the desired end-state, allows us to carry out a thought experiment to see what the general transition paths are for this case. In general it allows us to discuss which structures could be potentially established first, and which would follow, during such transition. Aim of this discussion is to address the question – how can this transition come about?

Our guiding principle is to look for incentives, and identify the actors that will benefit from them to take an action. We start by looking at the system configurations that are produced through TranScript to address the question, what incentives do actors have to act.

A quick interpretation of the system configuration diagrams, as shown in figure 4.30, 4.31, 4.32 and 4.33, illustrate that at the present state there is an activity in the area of investment in Green Power assets (figure 4.30). In the Netherlands, primarily such Green Power assets are wind mills to generate wind power. Our analysis (figure 4.4) has shown that the rule of SDE+ feed-in tariff has created incentives for actors to invest in assets to produce wind power. Proliferation of wind power has created additional dynamics and two different types of external pressures. Firstly, it has created incentives to invest in auxiliary power assets (figure 4.7) to account for windless periods. This process is shaped by the rules of security of supply and safety, which are established to ensure reliable, uninterrupted and safe energy supply to the consumers. On the other hand it has created incentives to invest in power to hydrogen assets (figure 4.8) to account for excess wind power. Such green hydrogen can be mixed and transported via the natural gas network and the concerning

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) actors can benefit from the feed-in tariff for this green hydrogen. This process is shaped by the rules of SDE+ and Cost Recovery, which ensure that the actors investing in wind power and power to hydrogen assets can get return on their investments. At the present state, without any additional incentives, the above transition is already shaping up and creating pressures for additional structural changes in the energy system.

As discussed during our analysis (figure 4.7), wind power capacity does not displace conventional power capacity. As wind power is characterized by fluctuations, conventional power capacity is used as auxiliary power during windless periods and to enable system balancing. As mentioned, SDE+ rule has created incentives for actors to invest in wind power capacity. However, higher the proliferation of wind power the higher the amount of time these conventional power plants will be off-line. Furthermore, one of the primary incentive for an actor to invest in any asset is the cost recovery principle, where actors would like to get return on their investment. This can only be achieved if that investment keeps on operating – in this case wind mill keeps on generating power. So when wind mills generate power other conventional power production capacity providing auxiliary power have to be turned off-line, which is determined by the rule of the merit- order (figure 4.5). Due to the rule of the Merit-order, wind power replaces conventional power, thus implying that the primary objective of the actor that has invested in these conventional power producing assets is not being met. If these assets are underutilized the concerned actors would not have any incentives to invest (not limited to investment in new assets, but investing in the maintenance of the existing ones) in these assets and they might be dismantled and shipped off to China or other developing countries.

The Dutch energy system cannot survive solely on the basis of fluctuating wind power. Conventional power plants, which provide on-demand power, are necessary to have a balanced power network. There should be an incentive to keep auxiliary power on stand-by, to be used whenever required as a backup. It is not only important to have green energy but it is equally important to have a balanced power system that can be sustained. Proliferation of wind power, has created tensions in the system, to bring about changes in existing structures or the establishment of new structures. We will operationalize this thought process of the establishment of new structures by instantiating figure 2.5 (where we had discussed motivation to develop new structures).

During our discussion about the figure 2.5, we had proclaimed that if an actor is not happy with the output of its processes, he can either change his intrinsic motivation, or change the structure that shapes its processes he carries out. If this actor is not the main actor influencing the development of this particular structure he wants to be changed, he can lobby to other influential actors controlling the development of this particular structure to have it changed. For this case, we see that the actor, A 1: Auxiliary Power Owner, who is losing out on its return on investment, will lobby to change certain rules. More specifically, A 1 who has invested in Asset 1: Auxiliary Power assets will lobby to change the rule R 1: SDE+ in order to include Black Hydrogen, as proliferation of wind power has reduced the operating capacity of A 1’s assets. This dynamics is shown in figure 4.34, where the actor A 1 lobby to the actor A 2: Dutch Government to change SDE+ rule in order to include Black Hydrogen. This will allow A 1 to improve the return on investment on its assets. This

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) is one of the transition paths, where actor A 1 lobbies to the actor A 2 to change the rule R 1, but there might be another transition path, where actor A 1 lobbies to the actor A 2 to establish a new rule that helps A 1 to recover its costs (for example: direct financial pay-off).

Figure 4.34: Motivation for the establishment of new structures

Now we have excess hydrogen capacity at disposal. During our discussion of figure 4.19, we outlined under which conditions this hydrogen can be mixed and transported via the Dutch natural gas network. Our analysis have shown that if any significant amount of hydrogen (barring some traces, less than 0.5% molar, already present in the natural gas) is added to the natural gas then burners (figure 4.25), pipelines (figure 4.18) and Wobbe (figure 4.17 and 4.19) have to be changed. Discussion of figure 4.25 have shown that up to 5% of hydrogen by volume can be added into the current natural gas network without the need for up gradation of the burners. However, such addition of hydrogen will be carried out if the precondition that Guarantees/Liabilities/Insurances (figure 4.26) are already in place. If more than 5% hydrogen by volume is to be fed in the natural gas network then the old burners (figure 4.25) and pipelines (figure 4.18) have to be changed. Once the new burners are employed hydrogen percentage can be increased to 7-10%, and if hydrogen percentage has to be increased further than the pipelines need to be changed, this change should allow hydrogen percentage to be increased up to 14-20%. To overcome these thresholds, for higher percentage of hydrogen in natural gas, additional actions have to be carried out and there should be incentives available to do so.

If such incentives are not currently present, a potential event or a rule change may be able to create such incentives. Here we outline a thought experiment, where an event can create incentives for actors to act. Referring back to our figure 4.11 we see that the system condition of earthquakes in Groningen due to gas exploration has activated the rule of safety. So far, these earthquakes have been minor and not causing large scale safety issues. However, in a scenario where such earthquakes cause large scale damage and safety problems, this system condition would be much

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Chapter 4: Case 1 – Greening of Gas Case Study (VG2) more prominent, and the rule associated with safety will be more dominant and active than other rules, for instance more dominant than the rule of security of supply. Such dominant rule will create strong pressures on actors to act – which will result into higher gas import and lower exploitation of Groningen gas. However, this will require lowering of the calorific value of the imported natural gas to comply with the rule of the Dutch Wobbe. Thus providing additional incentives for actors to produce and mix hydrogen, which is a lower calorific gas, in the natural gas.

The above discussion shows how, by using TranScript, we can think through transition paths. Now we see TranScript in action. It only comes to life when we start thinking about what is going to happen and at every point when the story stops for lack of incentives, as an analyst we consider an occurrence of an event or a change of a rule that can create incentives for actors to act. Figure 4.34, gives insight into why and how actors are motivated to change structures and in turn the incentives to act. We assume similar mechanisms will occur for other structural changes.

For the VG2 case, the policy issue was to bring about the transition from the existing natural gas system towards a mixture of hydrogen and natural gas within the Netherlands. Our analysis using TranScript allows us to infer from the AND/OR and system configuration diagrams. Firstly, we get insights into the structures that are required to be established in order to nudge the transition towards a desired end-state. Secondly, as an analyst, knowing that we can interpret whether it is likely (or less likely) which structure will change or be established. The first part follows clearly from our analysis and can be inferred directly from the AND/OR and system configuration diagram. However, the second part is not directly provided by TranScript analysis but is more an analyst’s interpretation of the analysis and the corresponding diagrams. Key point to note here is that TranScript does not give a prediction of what is going to happen during transition, but rather it gives us a systematic approach to think through possible transition paths. The ensued discussion, through the application of TranScript to reflect on possible transition paths is all qualitative – it does not allow an analyst to predict volume of the assets and speed of the transition. However, if such things are required complementary techniques do exist. We will discuss in chapter 7 a paper by Yücel and van Daalen (2012), where they employ system dynamics technique to study the effect of SDE+ on the energy system in the Netherlands. Such activity of thinking through transition paths, by employing TranScript language, gives a basis for analysis and prompt complementary modeling exercises, if required.

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Chapter 5: Case 2 – Hydrogen for Transport Case Study

Chapter 5: Hydrogen for Public Transport Case Study

Given the potential of hydrogen as a clean and safe energy resource, it can be expected to play a larger role powering the transport sector in the future. Cleaner and less polluting public transport buses based on alternative fuels, such as hydrogen, are paramount if cities are to attain their ambitious emissions reduction targets. Public transport buses are high usage vehicles that operate in heavily congested areas where air quality improvements and reductions in public exposure to harmful air contaminants are critical (Karlström 2005, Badami and Haider 2007). As such, they are good candidates for achieving both near-term and long-term emission reductions as many buses are centrally kept and fuelled making the introduction of hydrogen as a public transport bus fuel more efficient and economical as just a few hydrogen refueling stations would be needed to get such a transition started (Kojima 2001, DOE 2002, Shabani, Andrews et al. 2012).

This case focuses on public transport buses for the city of Brisbane, Australia. Cities around the world have set ambitious emissions reduction targets. The primary environmental objective of the city is to reduce human exposure to harmful pollutants while at the same time not hindering the movement of people (Brisbane-Council 2007). This objective can be achieved in two ways – reduce the number of vehicles-kilometers and reduce the pollution from each vehicle (Brisbane-Council 2013). The number of vehicle-kilometers can be reduced by improving the public transport and simultaneously encouraging residents to use public transport instead of driving their personal automobiles. Pollution from each vehicle can be reduced by promoting the use of alternative fuel, such as hydrogen, vehicles that have lower emissions.

Brisbane is placing a large emphasis on clean public transport to reduce emissions. It envisions that by 2031, 75% of peak hour trips to the downtown CBD will be by public and active transport; secondly bus patronage will reach a target of 120 million annually by 2031 (from the current 67 million) and the carbon intensity of the bus fleet (tonnes/kilometres travelled) will decrease (Brisbane-Council 2007, Brisbane-Council 2013). Transport is an integral part of our society, it is a necessity rather than a luxury (Banister and Berechman 2001, Lakshmanan 2011). It counts alongside Health and Education as a basic building block of our society. Over the last few decades ease of transport has changed the way society thinks and operates – transport of food, freight, and people is driving global development and reducing disparities (ESCAP 2001, Tongia, Subrahmanian et al. 2005). Hence finding an alternative for depleting fossil fuels and reducing CO2 emissions is paramount for further development of the society.

The necessary conditions for this transition to take place are primarily:

Necessary condition 1: Need to have excess hydrogen capacity. This condition can be studied further by answering the following question: Can we create excess hydrogen capacity?

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Chapter 5: Case 2 – Hydrogen for Transport Case Study

Necessary condition 2: Need to have easy accessibility of hydrogen for refueling the public transport buses. This condition can be studied further by answering the following question: Can we have hydrogen available at bus depots for refueling the buses?

Necessary condition 3: Need to have hydrogen ready buses. This condition can be further studied by answering the following question: Can we have public transport buses that are compatible with hydrogen?

Each of the necessary condition for transition will be studied further, by answering numerous sub-questions.

Necessary Condition 1: Need for excess hydrogen capacity.

The question to be answered is Q 1. Can we create excess hydrogen capacity?

Excess hydrogen can be obtained in two different ways: A. Green hydrogen can be obtained through the conversion of wind or solar power into hydrogen via electrolysis of water. This condition can be further studied by answering the following questions:

Q 1A1. Can we build new green (solar and wind) power capacity? Q 1A2. Can we convert this green power into hydrogen?

B. Black hydrogen can be obtained through the conversion of natural gas and/or coal into hydrogen along with carbon capture and sequestration. This condition can be further studied by answering the following question:

Q 1B1. Can we produce hydrogen from coal and natural gas in combination with CCS?

Necessary condition 2: Need to have easy accessibility of hydrogen for refueling the public transport buses.

The question to be answered is Q2. Can we have hydrogen available at bus depots for refueling the buses?

We can transport hydrogen from the production site to the point of refueling the bus, or we can produce hydrogen on site. This condition can be further studied by answering the following questions:

Q 2A1. Can we transport hydrogen via pipeline or cylinders to the depot? Q 2A2. Can we decentrally produce hydrogen on-site at the refueling depot?

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Chapter 5: Case 2 – Hydrogen for Transport Case Study

Necessary condition 3: Need to have hydrogen ready buses.

This condition can be further studied by answering the following question: Q 3. Can we have public transport buses that are compatible with the hydrogen?

Usage of hydrogen will require that the buses are hydrogen-ready. For the purpose of this research two options for hydrogen buses are explored – pure hydrogen in combination with fuel cells and secondly the mixture of hydrogen and natural gas (Hythane) in combination with an internal combustion engine. This condition can be further studied by answering the following questions:

Q 3A1. Can we realize investments for public transport buses? Q 3A2. Can we have Hythane ready buses? Q 3A3. Can we have Fuel Cell hydrogen buses?

We apply the analytical framework developed in chapter 3 to analyze this case study. We start by addressing the above questions in order to make a system model and using this model we address the questions raised in chapter 1, which are the functional requirements of our framework.

Necessary Condition 1: Need for excess hydrogen capacity.

Q 1. Can we create excess hydrogen capacity?

The Australian transport sector is almost completely reliant on imported fossil fuels and is a major emitter of CO2 in urban Australia (DIT 2010). In addition to declining crude oil supplies and political instability in the regions with large oil reserves, strict emission regulations and environmental awareness are driving the research for the usage of alternative fuels in the transport sector (Turton 2006). Hydrogen is one of the clean fuel options for reducing vehicular emissions. When it is burnt the product is just water and not carbon dioxide and other harmful emissions, thus eliminating localized pollution at the point of usage (Balat 2008, Faunce 2012). If hydrogen can be produced from renewables or in conjunction with carbon sequestration technologies it has the potential to become zero emissions energy carrier (Shabani, Andrews et al. 2012).

Figure 5.1, presents this dynamics wherein the system condition (described as rising emissions along with the depletion of finite fossil fuel resources) together with the Rule of Brisbane Climate & Energy Framework have created drivers for actors active within the Energy sector, such as current and potential hydrogen producers, to take action and install new hydrogen production assets.

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Figure 5.1: Install Hydrogen Capacity

The Brisbane city council predicts huge population growth in Brisbane, especially in the suburbs. With population growth comes higher traffic, more vehicles, more emissions – hence Brisbane City Council has created an Energy and Policy framework through their ‘Living in Brisbane 2026 – Vision for Brisbane’, ‘Draft – Living in Brisbane 2031’ and ‘Climate Change and Energy Taskforce – A Call for Action’ documents, which has identified safe, reliable and clean public transport as means to keep Brisbane’s air clean and reduce greenhouse gas emissions to counteract the impacts of climate change (Brisbane-Council 2006, Losee, Herron et al. 2007, Brisbane-Council 2013).

Figure 5.2, presents this dynamics wherein the system condition of rising emissions together with the rule of Australian Climate & Energy policy along with the system condition of depletion of fossil fuel together with the rule of Security of supply are calling on the Actor, in this case the Brisbane City Council, to develop a framework to reduce emissions and make it a more livable city through its Climate and Energy framework.

Figure 5.2: Develop a framework to reduce emissions and make Brisbane livable

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Brisbane’s 2031 vision is shaped by Australian national climate and energy policy. The Australian Government has set the goals of reducing emissions from a minimum unconditional 5 % reduction from 2000 levels by 2020 (MacGill and Outhred 2007, RET 2011). Australia’s commitment to reduce emissions was reconfirmed last year by Greg Combet, Australia's climate change and energy efficiency minister, who said the country would "commit to limiting its greenhouse gas emissions from 2013 to 2020 with a Kyoto target consistent with the bipartisan target of reducing emissions to 5% below 2000 levels by 2020" (Harvey 2012, Wilson 2012).

Along these lines, Australia has come up with its Climate Change Plan for Securing Australia's Clean Energy Future, which intends to reduce carbon pollution and secure a clean energy future by putting a price on CO2 (in this case we refer to a price on CO2 as a carbon price) emission; promoting innovation and investment in renewable energy; improving energy efficiency, etc. (Australian-Government 2011). Carbon pricing is thought to be a primary policy instrument that will allow Australia to meet its 2020 targets. As it is foreseen, carbon pricing will change Australia’s electricity generation by encouraging investment in renewable energy like wind and solar power, and the use of cleaner fuels like natural gas. Finally, as part of this climate change plan (low and some middle income) households will be looked after with tax cuts, higher family payments and increases in pensions and benefits, to help meet the costs passed through by some businesses (Australian-Government 2011). This is in line with its Energy Policy, as outlined in the 2012 Energy White Paper, where it has highlighted new technologies to reduce emissions, improving energy efficiency and sustainable use of existing resources as a primary policy focus that will allow it to meet its 2020 obligations and secure a clean and productive energy future (RET 2012).

Figure 5.3, presents this dynamic wherein the system condition of rising emissions together with the rule of Kyoto Protocol along with the system condition of depletion of fossil fuels together with the rule of Security of supply are calling on the Actor, in this case the Australian Government, to develop a framework to reduce emission and meet future energy demands via its Climate and Energy policy.

Figure 5.3: Develop a framework to reduce emissions and increase security of supply

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The Australian government has identified a Carbon Pollution Reduction Scheme (CPRS), which puts a price on carbon in an efficient way as a primary instrument to meet its 2020 obligations (Australian-Government 2011). The CPRS will include all greenhouse gases included under the Kyoto Protocol. The emissions covered represent around 75 per cent of Australia’s emissions. Emissions from industrial processes, stationary energy (which includes electricity production), transport, waste, and oil and gas sources will be covered (DCC 2009, RET 2011). Carbon pricing approaches, including emissions trading schemes and carbon taxes, create a financial incentive to reduce emissions and to invest in renewable energy. As fossil fuels become more expensive, renewable energy sources become relatively cheaper, so energy investment shifts toward renewables (CEC 2010).

Complementing the CPRS is the Renewable Energy Target (RET) instrument, which requires that 20 per cent of Australia’s electricity be produced from renewable energy sources by 2020 (CEC 2010). To achieve these targets, the Government has set annual targets for each year, and requires Australian electricity retailers and large wholesale purchasers of electricity to demonstrate that they meet these targets (RET 2012). Between 2012 and 2030, the RET is expected to deliver an additional $18.7 billion of investment in renewable energy infrastructure, furthermore electricity generation from gas-fired power stations is expected to be 13% less, and from coal-fired plants to be 12% less with the RET in place (Saxe, Folkesson et al. 2008). Finally the Clean Energy Initiative (CEI) complements the Carbon Pollution Reduction Scheme and Renewable Energy Target, by supporting the research, development and demonstration of low-emission energy technologies, including industrial scale carbon capture and storage and solar energy (DCC 2008, DCC 2009, Australian-Government 2011).

Figure 5.4, presents this dynamics wherein the system condition (described as rising emissions and depletion of fossil fuels) together with the rule of the Australia Climate and Energy Policy are calling on the Actor, in this case the Australian Government, to develop instruments to meet the 2020 Kyoto targets. The result is three rules that aim at creating drivers to invest in renewables and improve the diffusion of renewables. These three rules are CPRS Carbon price instrument; RET renewable energy targets and CEI for carbon sequestration and R&D.

Figure 5.4: Develop instruments to meet 2020 targets

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These three rules that are established to improve the diffusion of renewables, aim at creating external pressures on various actors in developing excess hydrogen capacity assets. The transition towards hydrogen-based transport cannot begin unless there is enough hydrogen capacity available in the market. Such transition towards hydrogen based public transport can start by hydrogen produced from fossil fuel (along with carbon sequestration) in the short term, whereby green hydrogen capacity is stimulated over the longer term to make this transition truly sustainable. We are not going to focus on producing hydrogen from nuclear power for this case as a recent survey carried out by Angus Reid Consulting shows that the majority of the Australian population is against nuclear power (Angus-Reid 2007).

Following section discusses the development of these assets.

Q 1A1. Can we build new green (solar and wind) power capacity?

The Renewable Energy Target (RET) requires that 20 per cent of Australia’s electricity be produced from renewable energy sources by 2020 (CEC 2010). RET along with Feed-in Tariffs at state level (Queensland) have promoted investment in wind and solar power in the state, thus making investments in green power a safe bet. A feed-in tariff such as the Queensland Solar Bonus Scheme rewards eligible households and other small electricity customers that install solar power systems by paying them for the excess electricity they generate (Queensland-Government 2013). The scheme has a net feed-in tariff, implying that a green power producer is paid for the electricity he feeds back into the grid, if that is higher than the electricity he consumes (Hall 2012).

Figure 5.5, presents this dynamics wherein the system condition of investment in green power as a safe bet together with the rules of RET and Solar Bonus Scheme have created drivers for the Actor, in this case the Energy Sector, to install green power capacity.

Figure 5.5: Install Green Power Assets

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Q 1A2. Can we convert this green power into hydrogen?

RET and Feed-in Tariffs have created incentives for actors to invest in green power. When actors invest in any assets, they are bound by the primary rule of Cost Recovery (Cardone and Fonseca 2003, Unnerstall 2007). Along similar lines once actors invest in green power assets, they would like the operating capacity of their asset as high as possible (Mehta and Pathak 1998). One of the main problems with solar and wind power is intermittency – that can be the difference between day and night, or seasonal, summer and winter. How do we capture this green power and store it for a rainy day, literally. Fluctuations lead to grid imbalances leading to reliability and availability issues. Large- scale diffusion of green power is hampered by its fluctuating characteristics. The most important issue while developing a new energy system is not just to provide power, but at the same time guarantee reliability and availability of supply (Méray 2011). Fluctuating renewable energy can be stored in the form of electricity, in batteries or in the form of hydrogen through electrolysis of water. The hydrogen is then at a later point in time converted back into electricity when needed or used for other purpose (Hemmes, Patil et al. 2008, Patil, Laumans et al. 2013). Production of hydrogen from curtailed green power, is a way to improve their operating capacity and in turn the return on investments garnered from such assets.

Figure 5.6, presents this dynamics wherein the system condition that investment in green power is a safe bet together with the rule of RET, along with the system condition of return on investments together with the rule of Cost Recovery are calling on the Actor, in this case the Energy Sector, to invest in power to hydrogen technologies.

Figure 5.6: Invest in Power to Hydrogen Production Assets

Q 1B1. Can we produce hydrogen from coal and natural gas in combination with CCS?

In 2010, Australia was the world's largest coal exporter and fourth-largest liquefied natural gas exporter (EIA 2011). Australia is one of the few countries in the Organization for Economic Cooperation and Development (OECD) that is a significant net energy resource exporter (EIA 2011).

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Australia's gas resources are large enough to support projected domestic and export market growth beyond 2030 and are expected to grow further (Leather, Bahadori et al. 2013).

Figure 5.7, presents this dynamics wherein the system condition of return on investment together with the rule of Cost Recovery are calling on the Actor, in this case the Energy Sector, to invest in coal and natural gas.

Figure 5.7: Invest in Coal and Natural Gas

The technology to produce hydrogen from natural gas is proven and has been in existence for more than 100 years (Yang and Ogden 2007). Natural gas is reformed by steam, to release hydrogen and CO2. This CO2 can be captured to be used or sequestered (Collodi and Wheeler 2010). Approximately 80% of the hydrogen produced worldwide is derived from natural gas and petroleum (Stiegel and Ramezan 2006).

Furthermore, gasification of coal allows the development of a clean hydrogen pathway if it is carried out in combination with CO2 capture and sequestration (Cormos, Starr et al. 2008, Gnanapragasam, Reddy et al. 2010). Given the large coal reserves in Australia, coal gasification offers a viable mid-to-long term solution for the production of hydrogen (McLellan, Dicks et al. 2004). The Clean Energy Initiative (CEI), which is the part of the Australian Climate Change Plan, focuses on developing large industrial-sized carbon capture and sequestration projects, which aim to accelerate the development and deployment of capture and storage technologies that will reduce emissions from coal use (Australian-Government 2011). Capturing (and reusing or sequestering) this CO2 while producing hydrogen from natural gas and coal would be a good way for industries to reduce their carbon footprint and will allow them to effectively reduce the price on carbon they are expected to pay.

Figure 5.8, presents this dynamics wherein the system condition of rising emissions together with the rule of CPRS along with the system condition that carbon sequestration is possible together with the rule of CEI are calling on the Actor, in this case the Energy Sector, to invest in CCS technology during the production of hydrogen from coal and natural gas.

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Figure 5.8: CCS for Hydrogen Production from Coal and Natural Gas

Necessary condition 2: Need to have easy accessibility of hydrogen for refueling the public transport buses.

We can transport hydrogen from the production site to the point of refueling the bus, or we can produce hydrogen on site. This condition can be further studied by answering the following questions:

Q 2A1. Can we transport hydrogen via pipeline or cylinders to the depot?

Hydrogen can be transported via pipelines and tanker trucks and brought to bus refueling depots. Expertise for handling hydrogen is available, at least at industrial level.

For example in Europe around 1500 km of European hydrogen pipelines are currently in place (Leighty, Hirata et al. 2003). It would be safe and technically feasible to build a local pipeline system for gaseous hydrogen distribution. Hydrogen would be piped to a smaller number of refueling depots, where a number of buses are refueled (Ogden 1999). Pipelines are most effective for handling large flows of hydrogen for short distance delivery because pipelines are capital intensive (Simbeck and Chang 2002).

Besides the hydrogen pipelines, transport of hydrogen as a compressed gas by road trailer (known as a tube trailer) is a well-established distribution method. It is used widely in the industrial gas industry for the transport of relatively small volumes of hydrogen over short distances (Nagle 2008). Advantages of such central production of hydrogen and then transporting hydrogen to the required location is that central production allows capture of CO2, if hydrogen is produced from fossil fuels (Ogden 2001).

Expertise of hydrogen transport and usage is available close to home. From 2004 to 2007 three hydrogen-powered, fuel cell buses (EcoBuses) were placed in the Perth public transport fleet. To support these buses, hydrogen production, refuelling and support systems are in place (DPI 2008).

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The Perth hydrogen bus trial, which was known as Sustainable Transport Energy for Perth (STEP), was run in conjunction with similar trials in Europe, called the Clean Urban Transport for Europe (CUTE) project (DPI 2008). This project was promoted by Daimler Chrysler to develop and demonstrate an emission free and low noise transport system that would contribute to cleaner environment (Kentzler 2009).

Figure 5.9 presents this dynamics wherein the system condition of safe operations together with the rule of Safety, and the system condition of return on investments together with the rule of Cost recovery have created external pressures on the Actor, in this case the Energy Sector, to invest in hydrogen transport capacity.

Figure 5.9: Invest in hydrogen transport

Q 2A2. Can we decentrally produce hydrogen on-site at the refueling depot?

An important advantage of using hydrogen as a fuel is that it can be decentrally produced on- site at the point of usage from green power (Prince-Richard, Whale et al. 2005). Thus saving on costly handling and transport of fuel. Solar or wind power in combination with water electrolysis can produce hydrogen on site, this hydrogen can be stored locally in tanks (similar to benzene tanks) where vehicles can be refueled when necessary (Ogden 2001, Markert, Nielsen et al. 2007). So we can have hydrogen production right on site at the refueling depot thus negating any costs for hydrogen handling and transport and ensuring higher return on investments for actors.

Figure 5.10, presents this dynamics wherein the system condition that investment in green power is a safe bet together with the rule of RET, along with the system condition of return on investments together with the rule of Cost Recovery are calling on the Actor, in this case the Energy Sector, to invest in alternate power to hydrogen technologies.

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Figure 5.10: Invest in on-site Green power to Hydrogen

Necessary condition 3: Need to have hydrogen ready buses.

Usage of hydrogen will require that the buses are hydrogen ready. This condition can be further studied by answering the following questions:

Q 3A1. Can we realize investments for public transport buses?

Cleaner and less polluting city transit buses are paramount if cities are to attain their ambitious emissions reduction targets, as transit buses are high usage vehicles that operate in heavily congested areas where air quality improvements and reductions in public exposure to harmful air contaminants are critical.

Currently, Brisbane Transport (who operates public transport buses for the city of Brisbane) has more than 500 CNG buses in its fleet, approximately 50% of the fleet is CNG and the rest Diesel buses (date source: http://www.btbuses.info). There have been tremendous innovations in the diesel engine technology over the past few years – for example, advanced engine electronic combustion control, fuel injection systems and turbochargers to optimize performance and lower the emissions (Gifford 2003). Advanced low-sulphur fuels are available in the market. These cleaner diesel fuels produce lower emissions and enable advanced emissions treatment systems (catalysts and filters). A lower amount of sulphur in diesel fuel enables catalytic converters to be used, which in turn lowers carbon monoxide (CO), nitrogen oxide (NOx) and hydrocarbon (HC) emissions. Emissions treatment such as particulate filters and oxidation catalysts reduce emissions of ozone- forming compounds (NOx and HC), trap and eliminate particulate matter (PM) (Gifford 2003, Kassel and Bailey 2004).

Currently, diesel emissions are reduced by turbo-charging, after-cooling, high pressure fuel injection, retarding injection timing and optimizing combustion chamber design. Turbochargers reduce both NOx and PM emissions by approximately 33 percent when compared to naturally aspirated engines. Combustion chamber improvements and air-fuel injection advancements are ongoing in the industry and result in improved fuel economy and emission reductions (WSU 2004).

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As diesel engine improvements have already reached their limit, NOx and PM emission control requires after-treatment devices to satisfy new, stringent emission standards. In the long run if emission standards get more stringent for PM and NOx then diesel buses will have difficulty in meeting their requirements. Emission standards are minimum compliance requirements that set the upper limits for the amount of pollutants a vehicle can emit into the air. Australian emission standards are based on European regulations (Euro Standards) for light-duty and heavy-duty (heavy goods) vehicles, and the long term policy is to fully harmonize Australian regulations with UN ECE standards (DIT 2010). Australia regulates its vehicle emissions through Australian Design Rules (ADRs). The ADRs set the standards (for both safety and environmental performance) that new vehicles are required to meet prior to their first supply to the Australian market (DIT 2010). As compared to diesel buses, natural gas (NG) buses have been proposed as a much cleaner alternative to conventional diesel. Consisting primarily of methane and other light hydrocarbons, natural gas does not contain hydrocarbons that form harmful emissions. In fact, the principal source of particulate emissions from natural gas vehicles is the combustion of lubricant. Replacing heavy- duty diesel vehicles with CNG equivalents is one option for reducing vehicular particulate emissions dramatically (DOE 2002, Tzeng, Lin et al. 2005). Cities have started investing in CNG buses, for example cities such as Mumbai and Delhi have completely shifted their fleet from diesel buses to CNG buses (Yedla and Shrestha 2003). For cities in developing countries like India, CNG buses offer low emissions and cost effective public transport.

Brisbane Transport is the decision-making actor during the procurement of new buses. Bus procurement is a politically sensitive process, as public money is involved (Welsh 2007).

Figure 5.11 presents this dynamics wherein the system condition of rising emissions together with the rule of emission standards, and the system condition of transport is an important part of our lifestyle together with the rule of Accessibility have created external pressures on the Actor, in this case Brisbane Transport, to invest in public transport buses.

Figure 5.11: Invest in Public Transport buses

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Currently, there is a lot of research going on in the field of transport based on hydrogen as a fuel. Major streams of the research can be sub-divided into two parts: using pure hydrogen in fuel cells (Tzeng, Lin et al. 2005, Schade, Wietschel et al. 2007, Whitmarsh and Wietschel 2008); and the other as a mixture of hydrogen and natural gas (Karim, Wierzba et al. 1996, Bauer and Forest 2001, HydroThane 2004, Hythane 2007). Hythane, a patented product, is a mixture of 20% by volume of Hydrogen and 80% Methane (Hythane 2007).

Q 3A2. Can we have Hythane ready buses?

CNG buses are looked upon as a potential alternative to diesel buses – they are less polluting and the fuel is widely available. However, in an effort to reduce their pollutants further, CNG buses can be converted to run on hythane (Bauer and Forest 2001). Mixtures of hydrogen and natural gas are considered viable alternative fuels to lower overall pollutant emissions but suffer from problems associated with on-board storage of hydrogen resulting in limited vehicle range (Nagalingam, Duebel et al. 1983, Karim, Wierzba et al. 1996).

Hythane, a patented product, is a mixture of 20% by volume of H2 and 80% Methane (Hythane 2007). Hythane is a product and a trademark of an Australian Company, Eden Energy (Solomon 2012). The laboratory for Transport Technology at University of Gent, Belgium has done comprehensive research on the suitability of hythane for public transport buses. In its experiment a city bus with the adapted MAN CNG engine was tested on a chassis dynamometer at four speeds (30, 50, 70 and 80 km/h) with natural gas and hythane (HydroThane 2004). The same load conditions at the same speed were realized for the two fuels so that exhaust emissions concentrations can be compared. Averaged over the four speeds the exhaust gas concentrations with Hythane as a fuel compared with natural gas are: 66% reduction of unburned hydrocarbons (HC), 32% reduction of nitrogen oxides (NOx), 17% reduction of carbon monoxide (CO) and 13% reduction of carbon dioxide (CO2). Experiments at the University of Lund and City of Malmo gave similar results for Hythane (Ridell 2005).

Many cities in the world are experimenting with Hythane. For example the Beijing Hythane Bus Project, whose demonstration phase will be to adapt 30 natural gas engines for Hythane operation (Ortenzi, Chiesa et al. 2007). Further, San Francisco airport is planning to run its airport shuttles on Hythane, and a Hythane refueling station will be built soon (Bishop 2011). There is a Hythane refueling station in Delhi, India since 2009 and plans are afoot to convert vehicles and adapt them for Hythane fuel (Solomon 2012).

Although there are experiments going on around the world for the usage of Hythane, the cause for concern is due to increased costs of hydrogen production, in comparison with pure natural gas (Ma, Naeve et al. 2010, Bishop 2011), and added costs of hydrogen handling and mixing with natural gas (Menanteau, Quéméré et al. 2011).

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Figure 5.12 presents this dynamics wherein the system condition of rising emissions together with the rule of emission standards, and the system condition of depletion of fossil fuels together with the rule of Security of Supply, and the system condition of return on investments together with the rule of Cost recovery have created external pressures on the Actor, in this case Brisbane Transport, to invest in Hythane buses.

Figure 5.12: Invest in Hythane buses

Q 3A3. Can we have Fuel Cell hydrogen buses?

Fuel Cell buses run on pure hydrogen, which can be stored onboard in high pressure cylinders or could be produced onboard through natural gas or methanol. The only exhaust of these buses is pure water (Karlström 2005). There are many cities in the world currently experimenting with Fuel Cell buses – for example the Clean Urban Transport for Europe (CUTE) is a European Union project which saw the development and testing of 27 hydrogen fuel cell buses – three in each of nine cities in Europe, then STEP project in Perth Australia that experimented with Fuel Cell buses (DPI 2008, Hyfleet-CUTE 2009, Kentzler 2009).

Despite a number of experiments around the world, this technology is still in its experimental phase and it will be few years before it is commercialized. One thing is that the bus prices are currently exorbitant compared to other alternative fuel buses, thus putting this technology out of reach of many public transport authorities (Tzeng, Lin et al. 2005). Not just bus procurement costs are high, but hydrogen as a fuel is expensive and then there is the added expense of building expensive hydrogen handling systems for storage and refueling of buses (DPI 2008, Menanteau, Quéméré et al. 2011). High costs make it difficult for actors to ensure cost recovery of their investments.

Figure 5.13 presents this dynamics wherein the system condition of rising emissions together with the rule of emission standards, and the system condition of depletion of fossil fuels together

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Chapter 5: Case 2 – Hydrogen for Transport Case Study with the rule of Security of Supply, and the system condition of return on investments together with the rule of Cost recovery, and the system condition of safe operations together with the rule of Safety have created external pressures on the Actor, in this case Brisbane Transport, to invest in Fuel Cell buses.

Figure 5.13: Invest in Fuel Cell buses

Within the framework of the Greening of Gas project (also discussed in chapter 5), there were two surveys carried out to study the public acceptance of hydrogen. For more details we refer you to (Van den Bosch, Molin et al. 2004), (Zachariah, Hemmes et al. 2005) and (Zachariah-Wolff and Hemmes 2006). The results were encouraging and show that the support for hydrogen technologies for transportation is generally positive. These results were later confirmed by a similar study done for Australia, more details can be found here (Altmann, Schmidt et al. 2003, O'Garra, Mourato et al. 2007). From the surveys it was clear that the public is very familiar with the concept of hydrogen as a fuel for transport. Fuel cells promise no carbon dioxide emissions, quieter engines, faster acceleration, and more innovative shell design. When asked if they would be prefer to drive a hydrogen-powered fuel cell vehicle rather than a conventional (all else being equal), 92% said “yes.” The results for the transport part of the survey are summarized below.

The results of the survey show that when everything else remains the same as a conventional bus, a hydrogen bus that is assumed to have no harmful emissions and makes less noise was preferred by respondents (95%). Here the point of reference were the three hydrogen fuel cell demonstration buses already in operation as part of the Clean Urban Transport for Europe (CUTE) project in Amsterdam (Hyfleet-CUTE 2009). We also saw that more highly educated people were more willing to use the hydrogen bus. If the hydrogen bus was more expensive, one third of the respondents indicated that they would take the conventional bus. This concern for cost was particularly evident with the older respondents. For the hydrogen usage in public taxis, respondents were presented with different scenarios for the use of a fuel cell taxi. Our results show that respondents were eager to use the hydrogen taxi if all things are equal when compared to diesel

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Chapter 5: Case 2 – Hydrogen for Transport Case Study taxi. Approximately 95% preferred using the hydrogen taxi if the level of service was expected to be the same and the costs were similar. However, if the taxi fare for the hydrogen fuel taxi was increased by 2 euros (roughly 10% increase over the average taxi fare in the Netherlands), more than half of the respondents (53%) still chose the hydrogen taxi. When the hydrogen taxi was said to cost the same but assumed to be slower (e.g., arriving 2 min later at the destination), there was still a clear preference (75%) for the hydrogen taxi. Finally, the results of the survey show that for each application investigated, increased costs were a concern for switching to hydrogen applications (Zachariah-Wolff and Hemmes 2006).

Cost is a sensitive issue and affects bus patronage. As seen in recent 1 – 2 years, Brisbane Bus patronage has been dropping moderately and high ticket costs is one of the reasons sighted for this drop of patronage (Feeney 2012). Lowering ticket costs is proposed as a way to stem this patronage drop (Moore 2013). In light of the rising emissions Government can introduce grants to subsidise higher hydrogen production, storage and handling costs. Such grant can be along the lines of the Renewable Energy (Electricity) Act 2000 (EIA 2011) that provides financial assistance to low and middle-income households from the expected increases in the cost of living arising from the introduction of the Carbon Pollution Reduction Scheme (CPRS) (Karlström 2005) and the Ethanol Production Grants Program, which provides a bonus amount per liter of domestic production and import of biodiesel and renewable diesel (RET 2011).

Figure 5.14 presents this dynamics wherein the system condition of rising emissions together with the rule of CPRS, and the system condition of transport is an important part of our lifestyle together with the rule of Accessibility, and the system condition of return on investments together with the rule of Cost recovery have created external pressures on the Actor, in this case the Australian Government, to develop an instrument to make hydrogen and hydrogen technologies affordable.

Figure 5.14: Develop an instrument to make hydrogen affordable

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Exhaust emissions from the diesel engines are by-products of the combustion of the fuel. As per British Petroleum (BP) fact sheet, for every 1kg of diesel burnt, there is about 1.1kg of water (as vapor/steam) and 3.2kg of carbon dioxide produced. Unfortunately, as there is no 100% combustion, there is also a small amount of byproducts of incomplete combustion and these are carbon monoxide, hydrocarbons and soot or smoke. In addition, the high temperatures that occur in the combustion chamber promote an unwanted reaction between nitrogen and oxygen from the air. This result in various oxides of nitrogen, commonly called NOx (BP 2002). Figure 5.15 below shows the composition of different gases in diesel engine exhaust, exhaust from public transport buses typically contains:

• Particulate matter (PM) – soot • Nitrogen oxides (NOx) – lung irritant and smog. • Carbon monoxide (CO) – poisonous gas • Hydrocarbons (HC) – smog • Carbon Dioxide (CO2) – Greenhouse gas

Emissions regulated by Current Emission Standards For Every 1 KG Diesel Emissions KG % Water (Vapor/Steam) 1,1 25,49 CO2 3,2 74,14 NOx 0,008 0,19 PM 0,0017 0,04 HC 0,0035 0,08 CO 0,003 0,07 Data Source: www.bp.com.au/fuelnews

Emissions per 1 KG of Diesel NOx PM HC CO

Water (Vapor/Steam) CO2 NOx PM HC CO

Figure 5.15: Exhaust from Diesel Buses

Particulate matter is the general term for the mixture of solid particles and liquid droplets found in the air. Particulate matter includes dust, dirt, soot, smoke and liquid droplets. It can be emitted into the air from natural and manmade sources, such as windblown dust, motor vehicles, construction sites, factories, and fires. NOx emissions produce a wide variety of health and welfare effects. NOx can irritate the lungs and lower resistance to respiratory infection (such as influenza). NOx emissions are an important precursor to acid rain that may affect both terrestrial and aquatic ecosystems. CO is the product of the incomplete combustion of carbon-containing compounds

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(Cohen 2005). CO contributes to the greenhouse gas effect and global warming. HC is comprised of unburned hydrocarbons in the fuel; it contributes to smog (blue haze over heavily populated cities). Although CO2 emissions are more than 75% of the total emissions, and it is a greenhouse gas (GHG) and has a huge global warming potential, it is still not mandatorily regulated by emission standards.

Emission standards for the heavy duty diesel vehicles generally limit exhaust emissions of four pollutants (DieselNet , Walsh 2000): Nitrogen oxides (NOx), Particulate matter (PM), Hydrocarbons

(HC), and Carbon monoxide (CO). Carbon dioxide (CO 2) emissions correlate to the fuel efficiency of the vehicle, and are not limited by emission standards. For example, the current European emission standards do not set limits for CO 2 emissions – CO 2 is controlled through voluntary agreements with the automobile manufacturers. Australia regulates its vehicle emissions through Australian Design Rules (ADRs). The ADRs set the standards that new vehicles need to comply with prior to their first supply to the Australian market (DOTARS). Through the ADR’s Australian public transport buses are subject to the European Union (EU) emission standards. They are a set of requirements outlining the limits for tailpipe exhaust emissions for the new vehicles sold in Australia. The emission standards are defined in a series of EU directives – emission standards for new heavy-duty diesel engines are commonly referred to as Euro I through Euro V (DieselNet). Euro I standards were introduced in 1992, and over the period 1992-2008, the permissible NOx emission limits have reduced by 75%, PM limits have reduced by over 97%, HC limits have reduced by 58% and CO limits have reduced by 67% (Patil and Brown 2008). As of now Australian public transport buses should satisfy Euro IV standards (DOTARS 2004). Euro V emissions standards will commence for new model vehicles from 1 November 2013 and for existing models from November 2016. Euro VI emissions standards will commence for new model vehicles from July 2017 and for existing models from July 2018 (DIT 2011, RET 2011).

Over the years emissions standards have been highly effective in reducing emissions, and stringent emission standards is an important instrument known worldwide to reduce urban emissions and such standards have managed to deliver improvements in urban air quality despite growth in vehicle use (DIT 2010). As can be seen from figure 5.16 below (data source (DOTARS 2004)), over the next 10 years NOx, PM, HC and CO are projected to decrease in Australia, but CO2 concentration is forecasted to increase in the future (Walsh 2000, Schulte-Braucks 2006). Improvements in the diesel technology and fuels have made this possible, this transition has resulted in heavy-duty diesel engines that are more reliable, durable and less polluting than the diesel engines of the past (Scheinberg 1999). On the other hand carbon dioxide emissions from road transport are forecasted to increase in the future due to an increase in the number of vehicles. As said before, Carbon dioxide is not regulated through emission standards – Carbon dioxide emissions is a function of the fuel efficiency of vehicles and this is regulated with voluntary agreements with vehicle manufacturers.

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Projected emissions for Key Pollutants for Australia - Existing Measures

160 140

120 NOx 100 PM 80 HC 60 CO Emissions 40 CO2 20 Percentage of Year 2000Year Percentage of 0 2000 2005 2010 2015 2020 Year

Figure 5.16: Projected emissions for key pollutants for Australia until 2020.

Along these lines, and as part of its Securing a Clean Energy Future plan, the Australian

Government announced it will introduce mandatory CO2 standards on all light vehicles from 2015 (RET 2011). Such mandatory CO2 standards for Heavy vehicles such as Public Transport buses will make alternative fuel buses, for example running on Hydrogen, more attractive (Patil, A.N et al. 2007, Patil and Brown 2008).

Figure 5.17 presents this dynamics wherein the system condition of rising emissions together with the rule of Australian Design Rules (ADRs) have created external pressures on the Actor, in this case the Australian Government, to develop a framework to reduce vehicular emissions.

Figure 5.17: Develop a framework to reduce vehicular emissions

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Results

Figure 5.18 gives an overview of the transition towards hydrogen buses for public transport for Brisbane, Australia. The three necessary conditions required for this transition are:

Necessary condition 1: Need to have excess hydrogen capacity.

Necessary condition 2: Need to have easy accessibility of hydrogen for refueling the public transport buses.

Necessary condition 3: Need to have hydrogen ready buses.

Figure 5.18: Overview of the necessary conditions for the Transition towards Hydrogen buses for public transport

Our analysis shows that the necessary conditions are not met as of yet, and once we meet the necessary conditions we will have a transition towards hydrogen based public transport. Below, we will address the questions posed in chapter 1 to garner insights obtained through the application of our framework to analyse this transition.

AND/OR diagrams presenting all the assets

We start by opening up the first necessary condition box – of creating excess hydrogen capacity. Figure 5.19 gives an overview of the assets required for creating excess hydrogen capacity. The assets are presented as an AND/OR diagram, where the necessary conditions are shown as and , and the alternate conditions are shown as or . As seen from the figure hydrogen production can be carried out in two different ways: black hydrogen and green hydrogen.

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Figure 5.19: AND/OR diagram for the first necessary condition of excess hydrogen capacity

Furthermore, we open the box of the second necessary condition for transition – to have easy accessibility of hydrogen for refueling. Figure 5.20 gives an AND/OR diagram for the second necessary condition. As we can see, hydrogen can be made available at the refueling depot in two alternate paths: either we produce hydrogen centrally and transport it to the depot via pipelines and trucks or else we can produce hydrogen on-site from green power and electrolysers.

Figure 5.20: AND/OR diagram for the second necessary condition to have easy accessibility of hydrogen for refueling

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Finally, we open the box of the third necessary condition for transition – to have hydrogen- ready buses. Figure 5.21 gives an AND/OR diagram for the third necessary condition. We can have two types of hydrogen buses; one running on Hythane (mixture of hydrogen and natural gas) and another running on pure hydrogen.

Figure 5.21: AND/OR diagram for the third necessary condition to have hydrogen-ready buses

For this case we have identified three different necessary conditions: to have excess hydrogen capacity (as presented in figure 5.19), accessibility of hydrogen for refueling (as presented in figure 5.20), and hydrogen-ready buses (as presented in figure 5.21). For the first necessary condition we have identified two ways to produce hydrogen. For the second necessary condition, as well, we have identified two ways of bringing hydrogen to a bus depot for the refueling of buses. However, for the third necessary condition, we observe that this transition cannot take place without the asset – hydrogen-ready (Hythane and/or Fuel cell buses) buses. According to our case analysis the primary rule governing the process (operation) of the establishment of hydrogen bus assets are emission standards and cost recovery. Hence we have identified emission standards and cost recovery as crucial rules for this transition.

System configuration along with relevant structures

Now we will address our second question about identifying the structures we need during transition and which actors would develop these structures. To do this, we will plot the system configurations along with the relevant structures for transition.

1. System configuration for the first necessary condition

Figure 5.22 gives an overview of the structures required for hydrogen production. The required assets for this transition path are displayed in the middle, flanked by rules on either or both side.

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Here we take a transitive relation, where the direction of the arrow indicates that the first structure was influential in driving or shaping the development of the second structure.

Figure 5.22: System configuration for hydrogen production

2. System configuration for the second necessary condition

Figure 5.23 gives an overview of the structures required for hydrogen accessibility at the refuelling depot.

Figure 5.23: System configuration for hydrogen accessibility at refuelling depot.

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3. System configuration for the third necessary condition

Figure 5.24 gives an overview of the structures required for hydrogen buses.

Figure 5.24: System configuration for hydrogen ready buses.

From the above discussion we see that hydrogen can be produced in two different ways, further hydrogen can be made available at the depot in two different ways and finally we can have two kinds of hydrogen buses. This gives us primarily eight different system configurations for the desired end-state.

Discussion

For this case the policy issue was to bring about the transition from existing fossil fuel buses towards hydrogen buses for a city based public transport. Here too, our analysis using TranScript allowed us to produce AND/OR and system configuration diagrams. These diagrams impart insights into the structures that are required to be established in order to bring about the transition towards a desired end-state. We see that there are primarily eight different system configurations for the desired end-state. Of course, TranSript do not automatically predict which transition path the transition will follow or what will be de precise system configuration of the desired end-state. However, through the same reasoning process, which we carried out at the end of chapter 4 (VG2 case study), we can carry out a thought experiment to outline the conditions under which this transition would happen. As such interpretation is not directly provided by TranScript analysis, but

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Chapter 5: Case 2 – Hydrogen for Transport Case Study is more of an analysts’ interpretation of the analysis and the corresponding diagrams, thus for simplicity purpose we have not replicated it for this case study. For the readers who are interested in knowing, how such thought experiment can be carried out to see what the general transition paths are for this case, we refer them to our discussion at the end of chapter 4.

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Chapter 6: Case 3 – District Heating System Case Study (DHS)

Chapter 6: District Heating System Case Study

Emissions from energy consumption in the end-use sectors (i.e. industrial, residential and commercial buildings) of the global economy can be lowered through energy conservation practices. The technology to capture industrial waste energy streams to be recycled into useful heat is available (Casten and Ayres 2005). Several works have emerged on useful “waste to energy” solutions as well as innovative recovery techniques (Bonilla, Blanco et al. 1997, Lunghi and Burzacca 2004, Chinese, Meneghetti et al. 2005) that could help reduce this dependence on fossil based fuels. Also the use of both industrial waste heat and other natural low temperature heat sources (geothermal, solar, etc) in district and space heating have received greater research attention in recent times (Faninger 2000, Lottner, Schulz et al. 2000, Bloomquist 2003, Hepbasli and Canakci 2003, Ozgener, Hepbasli et al. 2005). Such low temperature heat sources may not be practically useable at their current state (temperature) but could be thermally upgraded into useful heat, to be used as an energy carrier.

This case studies the usage of waste heat, from an industrial process, for a city based district heating. The surplus heat produced during industrial processes is often wasted, despite its valuable energy content. Harnessing and reusing this energy seems to be a possible potential solution for alleviating some of the energy shortage problems humankind is facing. From a societal perspective, this could result in cost-cutting as well as a better environment. Such usage of industrial waste heat for a District Heating System (DHS) would improve the overall efficiency of the energy system. Improving energy efficiency means using less energy input for a given level of service. This can be achieved by using energy-saving appliances and equipment for recycling. Recycling energy entails less dependence on fossil fuels and prolonging the life of finite resources, which is one of the most cost-effective means of becoming less dependent on fossil fuels (EZ 2011).

Heating systems are an integral part of our society and a necessity in colder countries, not just a luxury. Hence finding an alternative for depleting fossil fuels and reducing emissions is paramount for further development of the society. Buildings account for around 30% of total energy consumption in the Netherlands and as such offer great potential for energy savings. The bulk of the emissions from households are the resultant of gas consumption used for space heating (van der Waals, Vermeulen et al. 2003, Sunikka 2006). In order to reduce emissions from households, innovation in energy conservation should take center stage (SenterNovem 2008). Utilizing waste- heat for heating in households offers that opportunity. Such a District Heating System (DHS), based on waste heat, can make a significant contributions to reduce GHG’s and air pollution (DOE 2005). The system will save fossil fuels and reduce carbon dioxide and other emissions because many existing fossil fuel burning furnaces will no longer be needed (TEAM 2001).

The necessary conditions for this transition to take place are primarily:

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Necessary condition 1: Need to be able to capture waste heat. This condition can be studied further by answering the following question: Can we capture waste heat from an industrial process?

Necessary condition 2: Need to be able to transport and use waste heat for district heating. This condition can be studied further by answering the following question: Can we transport and use waste heat for district heating?

Each of the necessary condition for transition will be studied further, by answering numerous sub-questions.

Necessary Condition 1: Need to be able to capture waste heat.

The question to be answered is

Q 1. Can we capture waste heat from an industrial process for district heating?

Waste heat can be captured in two different ways:

A. Cooling water from the industrial process can directly be used for district heating. This condition can be further studied by answering the following question: Q 1A1. Can we safely use the industrial cooling water directly for district heating?

B. Heat can be transferred from the cooling water to another medium for heat transfer. This condition can be further studied by answering the following question: Q 1B1. Can we use water, steam or air as a medium to capture waste heat cost effectively?

Necessary condition 2: Need to be able to transport and use waste heat for district heating.

The questions to be answered are

Q 2. Can we transport heat efficiently and cost effectively?

Waste heat can be transported and used in two different ways:

A. Low temperature waste heat can be upgraded to a higher temperature by a heat pump before transportation. This condition can be further studied by answering the following question: Q 2A1. Can we efficiently upgrade waste heat using a heat pump?

B. Low temperature waste heat can be directly used in combination with floor heating and better insulation.

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Q 2B1. Can we cost efficiently use floor heating and upgraded insulation in combination with low temperature waste heat?

Q 3. Can we use waste heat for district heating cost effectively?

We apply the analytical framework developed in chapter 3 to analyze this case. We start by addressing the above questions in order to make a system model and later we use this model to address the questions raised in chapter 1, which are the functional requirements of our framework.

Necessary Condition 1: Need to be able to capture waste heat.

Q 1. Can we capture waste heat from an industrial process for district heating?

The industry (a Chemical Plant), source of the waste heat in the form of hot water, makes use of three different sources of water as cooling and process utility. The first stream consists of the water extracted from the canals. The water is used for cooling, and is then returned to the canals. Cooling towers lower the temperature of the water before releasing it into the canals. This stream does not contribute to the usable waste heat for the DHS project and will not be taken into account. The second stream is clean water used in the production processes. The last stream is groundwater which can be pumped up and used as cooling water. The last two streams are mixed together after the wastewater treatment (this is done to lower the temperature of the wastewater to 30 to 35 deg C) and then released into the North Sea. The company that produces this industrial heat (hereafter referred to as the Plant) has a contract in place with the Water-Board of the City to use the latter’s water pipes to transport the water into the sea.

Figure 6.1, presents this dynamics wherein the system condition (described as rising emissions along with the depletion of finite fossil fuel resources) together with the Rule of Delft 3E Sustainability framework have created drivers for actors, in this case the Energy sector, to take action and install waste-heat capturing assets.

Figure 6.1: Install waste-heat capturing assets

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Chapter 6: Case 3 – District Heating System Case Study (DHS)

In line with the Kyoto objectives, the municipality of the City has formulated a strategy for 30% reduction in annual emissions in 2020 (and 50% reduction of annual emissions in 2050), as compared to 1999 (Delft 2009, Rommens 2011). The City has based its energy policy in the so- called 3E sustainability plan – where sustainability comprises of economic, ecologic and social sustainability (Delft 2003). The plan states two objectives – reduction in the average energy use of households by improving the energy efficiency and use of alternative fuels contributing 50% of the energy usage in 2012. In line with these objectives, the municipality has identified projects that would allow them to reduce CO 2 (SESAC 2006). This case study discusses one of the projects initiated by the municipality that will use residual industrial waste heat for district heating (Delft 2009). The excess heat in the industrial cooling water, which is currently wasted, is of substantial amount, and the aim is to extract the heat and use it for district heating.

Municipality, as the initiator of this project, strives for a feasible and efficient implementation. Its major goal is to lower the emissions, and secure a greener image for the City. DHS would involve investments in large-scale infrastructure and facilities. The cost of the construction of infrastructure for heat supply to buildings from such industrial waste heat is significantly more expensive than constructing a regular energy network based on natural gas (Grohnheit and Gram Mortensen 2003). Financial and other issues (such as building and ownership of the residual waste heat upgrading infrastructures) hampered the City from carrying out this project on its own (SESAC 2006). Hence a special purpose entity, a dedicated District Heating Company Eneco Delft Ltd. (DHCED) is established (in Dutch Warmtebedrijf Eneco Delft bv). DHCED is a special purpose company from the Dutch energy company Eneco that is responsible for the realization of the DHS (Rommens 2011). DHCED is a Public Private Partnership where the Municipality of the City is one of the public partners (SESAC 2006).

Figure 6.2, presents this dynamics wherein the system condition of rising emissions together with the rule of Dutch Climate & Energy policy along with the system condition of depletion of fossil fuel together with the rule of Security of supply are calling on the Actor, in this case the Municipality of the City, to develop a framework to reduce emissions in the form of Delft 3E Sustainability Plan.

Figure 6.2: Develop a framework to reduce emissions

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In accordance with the Kyoto targets, the Dutch cabinet’s Climate and Energy policy plan (as presented in the Clean and Efficient: New Energy for Climate Policy, and The Netherlands: a country for innovation), calls for 14% reduction of emissions in 2020 when compared to 1990 levels (EC 2009, EZ 2011). In the Netherlands, the European Energy Service Directive has been implemented in the form of the Energy Conservation Act ( Energiebesparingswet ) (EZ 2011). Energiebesparingswet provides the framework for national energy conservation policy and covers a large number of aspects relating to energy efficiency, such as: formulation of an energy action plan; monitoring energy efficiency; better provision of information on energy consumption; energy-saving requirements for appliances and equipment; and roll-out of smart energy meters in new-build and renovation projects (EZ 2011).

Figure 6.3, presents this dynamics wherein the system condition of rising emissions together with the rule of Kyoto Protocol along with the system condition of depletion of fossil fuel together with the rule of Energiebesparingswet are calling on the Actor, in this case the Dutch Government, to develop a framework to reduce emissions and meet future energy demands via its Climate and Energy policy.

Figure 6.3: Develop a framework to reduce emissions and increase security of supply

At the Dutch national level, the main instrument adopted to achieve the 2020 Kyoto targets is the Sustainable Energy Production (Subsidieregeling duurzame energieproductie) subsidy system (SDE+) that gives financial incentives for the production and supply of renewable heat (AgentschapNL 2012). The SDE+ incentives are structured as feed-in tariffs, and are financed through a levy on the energy bill of end consumers, which guarantee a minimum payment for renewable heat producer. Renewable technologies all compete for contributions from the same budget, with the less costly technologies eligible for funding first (Beerepoot and Marmion 2012). Generators of renewable heat must sell all generated heat at market prices. On top of these prices, producers receive a subsidy or “bonus” payment, up to a maximum predetermined price per GJ of green heat, which means that energy producers are ensured a minimum income (EZ 2011, Nortonrose 2013).

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Figure 6.4, presents this dynamics wherein the system condition (described as rising emissions and depletion of fossil fuels) together with the rule of the Dutch Climate and Energy Policy is calling on the Actor, in this case the Dutch Government, to develop instruments to meet the 2020 Kyoto targets via the SDE+ feed-in mechanism.

Figure 6.4: Develop instrument to meet 2020 targets

Waste heat can be captured in two different ways, either the cooling water from the industrial process can directly be used for district heating or else heat can be transferred from the cooling water to another suitable medium. Next, we will look into these conditions.

Q 1A1. Can we safely use the industrial cooling water directly for district heating?

The waste heat available from the plant is a low temperature heat. This heat is estimated at 1000 terajoules per year (Kleinegris 2003). The plant uses groundwater to cool its processes. Groundwater is pumped (11-20 million m 3 per year), which becomes hot whilst cooling the processes and is then mixed with treated wastewater (2,5 million m 3 per year). Water used for the waste water treatment process is bought from external parties, through a pipeline that is owned by the Water Board, the water (waste- and cooling water) is transported to the North Sea. The plant has a license to use the pipeline to dump the water in the sea. There is a discussion between the Plant and the Water-board to reduce the temperature of the waste water as the Water-board believes that the high temperature of the waste water is affecting its pipelines. By participating in this project, the Plant will be able to reduce the temperature of the waste-heat water, thus allowing it to maintain cordial relations with the Water-board.

This water cannot be re-used for safety reasons, because the quality is too low as it is mixed with chemical process water. Heat has to be extracted from this water to another suitable medium to be used for district heating. This contract with the water-board would still have to be continued. Once the heat is extracted the (relatively) cold water will be dumped into the sea. DHCED has to invest in assets to transfer this cold waste water to the Water Board pipeline going to the Sea.

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Figure 6.5, presents this dynamics wherein the system condition of contract conditions together with the rule of Water Board contract is calling on the Actor, in this case the DHCED, to invest in waste water dumping assets.

Figure 6.5: Invest in waste water dumping assets

Q 1B1. Can we use water, steam or air as a medium to capture waste heat cost effectively?

Heat can be transferred mainly in the form of steam or water. Steam based systems require a complex condensate system and thus considerable servicing and maintenance. Furthermore, they require elaborate pipe and connections systems, which means they are more expensive than water- based district heating systems (BINE 2007). Virtually all of the European district heating systems use hot water rather than steam (Gibbons 1982). Denmark, who is leading in district heating systems in Europe is planning to convert its existing steam based systems into water based, due to the low energy efficiency in steam-based systems (Elsman 2009). The possibility to use steam as the medium to transport the heat will be excluded as this option affects the cost requirement.

Figure 6.6, presents this dynamics wherein the system condition of return on investments together with the rule of Cost recovery, with the system condition of investment in renewable heat is a safe bet together with the rule of SDE+ along with the system condition of safe operations together with the rule of Safety are calling on the Actor, in this case the DHCED, to invest in assets to transfer heat into water.

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Figure 6.6: Invest in assets to transfer heat into water

Although waste-heat is free for the DHS, supply of waste-heat is not the core competence of the Plant, heat is a by-product of its operations. The fact is that the Plant has its processes in place, and the participation in the DHS project will reduce their operational flexibility as any modification in their processes will impact the residual heat availability for the DHS project. Any long term commitment for the supply of heat will interfere with their core competence and processes. Due to the hesitation of the plant in committing waste-heat for the project over the long term creates a need for an auxiliary heat unit. To ensure security of supply (and also to neutralize seasonal variations in waste water temperature) there is a need to invest in a large auxiliary unit, which would provide heat backup as and when necessary. Installing such a big back-up source of heat affects the cost recovery of the project.

Figure 6.7, presents this dynamics wherein the system condition of heating grid imbalance together with the rule of Security of supply is calling on the Actor, in this case the DHCED, to install auxiliary heat capacity.

Figure 6.7: Install Auxiliary heat capacity assets

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Necessary condition 2: Need to be able to transport and use waste heat for district heating.

Waste heat can be transported and used in two different ways: low temperature heat can be upgraded to a higher temperature by a heat pump before transportation so it can be used with normal heating systems or else low temperature waste heat can be directly used in combination with upgraded floor heating and better insulation. There is a tradeoff between upgrading the temperature of the water or improving the insulation and heating systems of the houses.

Q 2A1. Can we efficiently upgrade waste heat using a heat pump?

As mentioned the heat in the waste and cooling water must be converted to another clean and safe medium to transport the heat to the districts. For this transportation medium water is chosen. This means a heat pump is required to exchange heat to the water for district heating. The heat pump can also further heat the water. The temperature of the waste-heat available from the chemical plant is about 30-35 deg C (yearly average, with strong seasonal variations). The temperature required by normal radiators for space heating is 70-90 deg C. Hence, the heat needs to be upgraded to 70-90 deg C so that normal radiators can use it (Ajah, Patil et al. 2005, Ajah, Patil et al. 2007). If heat is upgraded to 70-90 deg C there is no added investment for upgrading of insulation and heating systems in the houses. However, one of the drawbacks of such system is that it is less sustainable than low temperature heating as energy is wasted in heat upgrading. To upgrade this heat, an electric or natural gas based heat pump can be used, thus increasing the emissions in the process.

Figure 6.8, presents this dynamics wherein the system condition that heat should be priced as natural gas with the rule of the NMDA along with the system condition of rising emissions together with the rule of the Delft 3E sustainability plan are calling on the Actor, in this case the DHCED, to install heat pump for temperature upgrade of the hot water.

Figure 6.8: Install heat pump

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Q 2B1. Can we cost efficiently use floor heating and upgraded insulation in combination with low temperature waste heat?

Low temperature is only possible in highly insulated houses with floor heating. This has a few advantages compared to high temperature (radiator) heating. Radiators function through radiation and convection of heat. They operate at a temperature around 80- 90 deg C (Sanner, Karytsas et al. 2003). Floor and wall heating have a higher share of radiation heating, allowing them to operate at lower temperatures (35-45 deg C), which makes them more energy efficient and in turn less emissions are released (Nordell and Hellström 2000, Hasan, Kurnitski et al. 2009).

Point to note here is that often such infrastructures are built by one actor and operated by another (Joosen 2007), so the actor making the higher investments may not be the one enjoying the reduced operating costs of low temperature heating. For example, the project developer will invest in better insulation and floor heating, but the rentee or a buyee who is living in that house will reap the benefits of low energy costs for heating (EZ 2011). Somehow there should be incentives created for project developers to invest in best available technologies for the reduction of emissions.

Figure 6.9, presents this dynamics wherein the system condition of return on investments together with the rule of cost recovery, and the system condition of heat costs should correspond to equivalent natural gas costs together with the rule of NMDA along with the system condition of rising emissions together with the rule of the Energy performance coefficient (EPC) are calling on the Actor, in this case the DHCED, to install floor heating and upgraded heating in combination with low temperature heating.

Figure 6.9: Install floor heating and better insulation

Actors will invest in best available technologies (BAT) in order to reduce emissions, only if they have incentives to do so. DHS project suffers as there few incentives for actors to invest in BAT as they cannot realize the high infrastructure costs from higher pricing as the pricing for waste-heat based energy is indirectly pegged to the equivalent natural gas energy. Since the 1980’s an informal

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Chapter 6: Case 3 – District Heating System Case Study (DHS) heat cost regulation system is in use. At that time the public energy suppliers decided to base heat cost rates on the total costs a comparable household would make for heating with an individual central heating system on natural gas. This Not More Than Usual (NMDA) principle is normative for most district heating systems in the Netherlands run by energy companies (Donkelaar, Boerakker et al. 2006), and it proposes that the heat should be priced according to the substitute product, not according to the real cost, which is a clear departure from competitive behavior and market power (Apotheker 2007). The basic idea is that to the end user, there should not be a financial difference between living in a house with district heating or living in a house with an individual gas boiler (Rommens 2011).

Within the Netherlands there is a new rule Warmtewet (Heat act) that is in the process of being introduced, most probably in 2014 (Kerstholt and Israëls 2013). Warmtewet is designed to protect consumers from high costs and provide security of heat supply (EZ 2009). The rule will ensure that households and mid-size industrial consumers (with connections less than 100 KW) would pay for heat ‘as if’ they heated their houses (establishment) with gas (Zee 2011). This mechanism is similar to the NMDA mechanism as discussed above. Hence we have combined the two in our analysis and named it NMDA as it has a broader impact on the Dutch energy system.

Figure 6.10, presents this dynamics wherein the system condition of return on investment together with the rule of Cost recovery along with the system condition of customer should not suffer together with the rule of the Dutch Climate and Energy policy is calling on the Actor, in this case the Energy Sector, to develop a pricing mechanism such as NMDA, which ensures that customers are not put into any negative position.

Figure 6.10: Develop a rule to ensure customers are not put into any negative position

Q 3. Can we use waste heat for district heating cost effectively?

Another aspect that should be taken into account while proceeding with DHS is the choice whether to connect an old housing district that already has the availability of another heating

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Chapter 6: Case 3 – District Heating System Case Study (DHS) system (pipes, radiators, floor heating plates, etc) or to connect a new housing district where there are no sunk costs of legacy systems. In older districts, a gas network is already in place and if it is operational, it would be cheaper to use gas for the heating of buildings instead of a new heating system where the investment costs are high. On the other hand new housing districts do not have any sunk costs of legacy systems, such houses can be easily adapted to be heated with district heat. From a cost recovery (which is a primary rule affecting investment decisions) perspective employing DHS in a new housing district would be the best option (Cardone and Fonseca 2003, Unnerstall 2007). This will ensure that the renewable heat capacity do not displace current natural gas capacity. Thus the sunk costs related to the investment in natural gas systems are avoided, and the actor who had made these investments can recover their costs without problems (Geels 2004). Figure 6.11, presents this dynamics wherein the system condition of return on investments together with the rule of cost recovery, along with the system condition of rising emissions together with the rule of the Energy performance coefficient (EPC) is calling on the Actor, in this case the DHCED, to install heating system (pipes, radiators, floor heating plates, etc).

Figure 6.11: Install heating system (pipes, radiators, floor heating plates, etc).

Since December 1995 the Netherlands has had a standard for the energy performance of new buildings. The standard stimulates arrays of energy saving measures and concepts, and is not focused on specific individual measures (Joosen 2007). The Dutch Building Code includes energy performance of buildings, by setting a maximum on a dimensionless number; the Energy Performance Coefficient (EPC) (Rommens 2011). From the EPC calculation outcome one can derive the final energy demand for space heating, domestic hot water and other building related energy demand. Household electricity use is not part of the EPC calculation. The government wishes to improve the energy performance of new buildings in stages by tightening up the Energy Performance Coefficient (EPC) system in the period up to 2020, with the ultimate aim that new homes should be energy-neutral from 2020 onwards (EZ 2011). EPC values have gotten stricter over the years, for example EPC in housing is now 0.6 since 2011. For the period 2006-2011 it was 0.8, period 2002-2006) it was 1.0, period 2000-2002 it was 1.2, and period 1995-2000 it was 1.4 (Rommens 2011). EPC is not fully mandatory in the Netherlands, homebuyers are allowed to sign a waiver that precludes the seller’s obligation to certify the building (Brounen and Kok 2011). Energy

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Chapter 6: Case 3 – District Heating System Case Study (DHS) performance regulations have already proven successful in achieving energy conservation in the Netherlands. The energy performance-based approach is also expected to encourage innovation in various energy saving techniques (Beerepoot and Beerepoot 2007). Figure 6.12, presents this dynamics wherein the system condition of rising emissions together with the rules of Dutch Climate and Energy policy and European Energy Performance of Buildings Directive (EPBD) are calling on the Actor, in this case the Dutch Government, to develop an energy saving mechanism in the form of EPC.

Figure 6.12: Develop an energy saving mechanism in the form of EPC.

The European Union (EU) and its Member States ratified the Kyoto Protocol in late May 2002. The EU target is 20% reduction of emissions by 2020, when compared to 1990 (EC 2002). In line with this agreement EU has formulated strategies to meet the Kyoto objectives (EC 2002). One of these is the energy performance and buildings directive to increase energy efficiency of the buildings within the EU. The passing of the Energy Performance of Buildings Directive (EPBD) in 2003 obliged all the European member states to implement energy regulations based on the concept of energy performance (EC 2003). The aim of this regulation in the building sector is to reduce energy consumption in buildings caused by heating, hot water production, lighting, cooling and ventilation (Beerepoot and Beerepoot 2007). Two requirements within the EPBD are: a general framework for calculation of the energy performance of buildings, and an application of minimum requirements on the energy performance of new buildings (Joosen 2007). In the Netherlands these are fulfilled through the EPC and the corresponding calculation method.

Figure 6.13, presents this dynamics wherein the system condition of rising emissions together with the rule of the Kyoto Protocol is calling on the Actor, in this case the European Union, to create a framework to reduce emissions from buildings in the form of EPBD.

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Figure 6.13: Develop a framework to reduce emissions

Results

Figure 6.14 gives an overview of the transition towards a district heating system based on industrial waste heat. The two necessary conditions required for this transition are:

Necessary condition 1: Need to be able to capture waste heat.

Necessary condition 2: Need to be able to transport and use waste heat for district heating.

Figure 6.14: Overview of the necessary conditions for the transition towards district heating based on industrial waste heat.

Our analysis shows that the necessary conditions are not met as of yet, and once we meet the necessary conditions we may have a transition towards district heating based on industrial waste heat. Below, we will address the questions posed in chapter 1 to garner insights obtained through the application of our framework to analyse this transition.

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AND/OR diagrams presenting all the assets

We start by opening up the first necessary condition box – of capturing waste heat. Figure 6.15 gives an overview of the Assets required for capturing waste heat. The assets are presented as an AND/OR diagram, where the necessary conditions are shown as AND , and the alternate conditions are shown as OR . As seen from the figure there is only one way to capture waste heat, which is to transfer it to water and dump the (industrial) cooling water in the sea.

Figure 6.15: AND/OR diagram for the first necessary condition to capture waste heat

Furthermore, we open the box of the second necessary condition for transition – to be able to transport and use waste heat for district heating. Figure 6.16 gives an AND/OR diagram for this second necessary condition. As we can see generally there are two ways to build a district heating system: either a low temperature system in combination with floor heating and upgraded insulation or a high temperature system that uses normal radiators in combination with a head upgrading unit such as a heat pump.

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Figure 6.16: AND/OR diagram for the second necessary condition to transport and use waste water for district heating.

For this case we have identified two different necessary conditions: to capture waste heat (as presented in figure 6.15) and transport and use waste heat for district heating (as presented in figure 6.16). For the first necessary condition we observe that the necessary condition of waste heat capture cannot be satisfied unless all the three lower level assets are present (viz: transfer heat in water, dump waste water and auxiliary heat capacity). For the second necessary condition we have identified alternate assets for transport and use of waste heat for DHS. The primary rule driving the process of establishment of waste heat capture assets is that of cost recovery. Hence for this case we have identified cost recovery as a crucial rule for this transition.

System configuration along with relevant structures

1. System configuration for the first necessary condition

Figure 6.17 gives an overview of the structures required for waste heat capture. The required assets for this transition path are displayed in the middle, flanked by rules on either or both sides.

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Here we take a transitive relation, where the direction of the arrow indicates that the first structure was influential in driving or shaping the development of the second structure.

Figure 6.17: System configuration for heat capture

2. System configuration for the second necessary condition

Figure 6.18 gives an overview of the structures required for heat transport and usage.

Figure 6.18: System configuration for heat transport and usage

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From the above discussion we see that waste heat can be captured in one way, further waste heat can be used for district heating in two different ways. This gives us primarily two different system configurations for this transition.

Discussion

For this case the policy issue was to bring about the transition towards usage of waste heat, from an industrial process, for a city based district heating. Here too, our analysis using TranScript allowed us to produce AND/OR and system configuration diagrams. We see that there are primarily two different system configurations for the desired end-state. Of course, TranSript do not automatically predict which transition path the transition will follow. However, through the same reasoning process, which we carried out at the end of chapter 4 (VG2 case study), we can carry out a thought experiment to outline the conditions under which this transition would happen. As such interpretation is not directly provided by TranScript analysis, but is more of an analysts’ interpretation of the analysis and the corresponding diagrams, thus for simplicity purpose we have not replicated it for this case study. For the readers who are interested in knowing, how such thought experiment can be carried out to see what the general transition paths are for this case, we refer them to our discussion at the end of chapter 4.

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Chapter 7: Discussion and conclusions

In this chapter we will conclude our research by highlighting how TranScript adds new insights to the currently available techniques to study transitions in STS. In chapter 2 we claimed that the dominant views of analyzing transition in STS are centered on the system level dynamics of the STS, where the focus is on an aggregated view of the system. A detailed structural analysis of an STS, which we have carried out during the course of this research, is not main-stream yet. The first part of this chapter will discuss our contribution to the literature studying transitions in STS and in the second part we will provide the conclusions of our research, a brief reflection on the research process and a future outlook for our framework.

Discussion

To specifically point out the added value of our TranScript framework we analyse three journal articles, each from the three primary bodies of literature we have used in chapter 2 to define the state of the art in studying transitions in STS:

1. Transition Management perspective, which is the most widely used perspective today to study transitions in STS 2. System Dynamics perspective that models system changes during the transition in STS 3. The Technology Innovation Systems literature that gives insights into technology diffusion during transition in STS

We have selected the following three journal articles because they report on studies of energy transitions in the Netherlands. Furthermore each article is representative of one of the above mentioned literature bodies and carries out empirical analysis to study transition. As our research focuses on studying transitions, during our discussion we have dedicated more effort in highlighting the contribution of this research to the field of Transition Management.

1. Transition Management: Geert Verbong and Frank Geels (2007). The ongoing energy transition: Lessons from a socio-technical, multi-level analysis of the Dutch electricity system (1960–2004). Energy Policy 35, 1025–1037. 2. System Dynamics: Gönenç Yücel and Cornelia van Daalen (2012). A simulation-based analysis of transition pathways for the Dutch electricity system. Energy Policy Volume 42, Pages 557–568. 3. Technology Innovation Systems: Roald A.A. Suurs, Marko P. Hekkert (2009). Cumulative causation in the formation of a technological innovation system: The case of biofuels in the Netherlands. Technological Forecasting & Social Change, 76, 1003–1020.

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Contribution to the Transition Management body of literature

To highlight our contribution to the Transition management perspective, we will take the reader by hand through the article by Verbong & Geels (2007). We will retell the story, as presented in this article, in terms of our TranScript framework. At all junctures we will attempt to be true to the original author’s ideas, unless interpretation or assumption is absolutely necessary. For example, Verbong & Geels do not always explicitly point out the actors (who is the owner of each process/action) for each action. But as our TranScript framework explicitly requires us to identify the actor who produces the action, we are required to make an assumption and assign actors to each process if and when they are not clearly mentioned. Secondly, as we are trying to be as close as possible to the original authors’ story, we will deviate a bit from our recommended methodology as presented in chapter 3. We will follow the methodology from point 3 of the method (i.e. Apply our analytical framework to identify the actors that have the ability to influence these structures, and the drivers required to motivate these actors).

Analysing the paper with the TranScript framework

Here we begin by identifying the assets and rules that were established during the transition in the Dutch electricity system and which actors were responsible for establishing the structures.

On pages, 1027 and 1028, Verbong & Geels point out that over the past few decades the Dutch Climate and energy policy has developed with a focus on industry policy. The precursor to the official climate and energy policy were the first Energy White Paper (1974) as presented on page 1927 and the second Energy White Paper (1979) as presented on page 1028. The policy goals could be summarized as to overcome energy scarcity and reliability issues by supplying cheap energy to the industry based on decentralized power generation through large industrial CHP’s. As the authors point out on page 1028, the relative share of industrial CHP in decentralised power increased to 95% in 1988.

Figure 7.1, presents this dynamic wherein two pairs of system condition and rule shape the actors’ actions. Firstly, the system condition of energy scarcity and reliability issues together with the rule of Security of supply along with the system condition of cheap energy to the industry for co- gen together with the rule of Industrial policy is calling on the Actor, in this case the Dutch Government, to develop a framework to reduce emissions and meet future energy demands via its Climate and Energy policy.

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Figure 7.1: Develop a framework to reduce emission and meet energy demand of future

Verbong & Geels point out (on page 1029) that an important development in the electricity sector that heralded the growth in decentralized power production was the 1989 Electricity Law. The aim of the law was to address energy scarcity and reliability issues while increasing the system efficiency, it further enforced unbundling of electricity production and distribution and created a new actor: the energy distribution company (EDC). This Law also allowed EDCs to generate electricity on a small scale. But EDCs circumvented this limitation by setting up joint ventures with industrial companies for the construction of large-scale CHP plants. Most decentral production came from industrial CHP, but also increasingly from district heating and horticulture.

Figure 7.2, presents this dynamic wherein the system condition of energy scarcity and reliability issues together with the rule of the Climate and energy policy is calling on the Actor, in this case the Dutch Government, to develop a framework to reduce energy scarcity and improve reliability via its 1989 electricity law.

Figure 7.2: Develop a framework to reduce energy scarcity and improve reliability

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On page 1032, Verbong & Geels identify the development of an important rule that further encouraged renewable electricity. The Dutch government established the MEP-regulation (Environmental quality of electricity production), where it provided a fixed feed-in tariff to producers of renewable electricity plus an additional tax exemption, which was gradually phased out. The 1989 electricity law was shaping the development of the MEP-regulation, where the aim was to reduce emissions from power generation and save precious fossil fuels by encouraging power generation through renewables.

Figure 7.3, presents this dynamic wherein the system condition (described as rising emissions and depletion of fossil fuels) together with the rule of the Dutch Climate and Energy Policy is calling on the Actor, in this case the Dutch Government, to develop rules, such as MEP that will encourage the diffusion of renewable electricity generation through feed-in tariffs, etc.

Figure 7.3: Develop instrument to reduce emissions during power generation

Furthermore on page 1032, the authors point out that there were two important reasons for the diffusion of renewable electricity assets, first being MEP (financial pay-off) and the second driver was the boosting of a green image on the part of the actors, such as EDC’s and Industry. In this case the intrinsic driver of the actors to boost their green image encouraged them to invest in renewable electricity assets, while this action was shaped by the MEP rule. This MEP rule ensured that investment in renewable electricity was a safe bet.

Figure 7.4, presents this dynamics wherein the system condition of investment in renewable electricity as a safe bet together with the MEP rule has created drivers for the Actor, in this case the EDC and Industry, to install renewable electricity capacity.

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Figure 7.4: Install renewable electricity capacity

Verbong & Geels focus on three types of feedstock for renewable electricity generation: wind, biomass and solar. On page 1033, the authors elaborate the development of wind power in the Netherlands. As apparent from the overall context of the article, MEP and feed-in tariff played an important role in the establishment of new wind turbine assets.

Figure 7.5, presents this dynamic wherein the system condition of investment in wind turbine asset as a safe bet together with the MEP rule has created drivers for the Actor, in this case the Energy Sector, to install wind turbine capacity.

Figure 7.5: Install wind turbines for electricity generation

In the same context of wind energy, Verbong & Geels point out the important issue of fluctuating wind energy and the requirement for back-up power, in the form of auxiliary power, during windless periods.

Figure 7.6, presents this dynamic wherein the system condition of grid imbalance together with the rules of Security of supply and Safety are calling on the Actor, in this case the Energy Sector, to install auxiliary power capacity that can be turned on and off as and when required to balance green

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Chapter 7: Discussion and conclusions power fluctuations. There was a need for building new auxiliary power capacity for back-up power in the past as that was a period of increasing demand. Perhaps today with supply and demand mostly balanced, there will be no requirement to establish new auxiliary power for corresponding wind capacity installed.

Figure 7.6: Install auxiliary power

On page 1044, Verbong & Geels discuss the potential of biomass as a feedstock for renewable electricity generation on page 1044. Co-firing of biomass has rapidly diffused, improving environmental performance of the electricity sector. The practice of co-firing is close to the incumbent regime, building on existing competences with coal combustion.

Figure 7.7, presents this dynamic wherein the system condition that investment in biomass/large scale generation is a safe bet together with the rule of MEP along with the system condition of economy of scale and rising demand for electricity together with the rule of cost recovery are calling on the Actor, in this case the Energy Sector, to implement biomass co-firing large scale power generation systems.

Figure 7.7: Install large-scale centralized power generation system

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The third renewable electricity technology the authors discuss is solar PV. On page 1034, they mention that solar PV is a very small niche in the Netherlands given the geographical location of the Netherlands and the high cost of solar power. Whatever small amount of solar PV investment that was carried out in the Netherlands was the result of the MEP and feed-in tariff and the intrinsic driver of the actors to boost their green image.

Figure 7.8, presents this dynamic wherein the system condition of investment in solar PV assets as a safe bet together with the MEP rule has created drivers for the Actor, in this case the Energy Sector, to install solar PV capacity.

Figure 7.8: Install solar PV for power generation

On page 1035 and 1036, the authors present their conclusions, wherein they discuss the state of renewable electricity in the Netherlands and draw a pessimistic picture for both wind and solar PV. This discussion is presented in the transition management language of regime and niche dynamics. The authors attribute the success of the biomass co-firing niche to its proximity to the existing regime of coal powered large scale power generation. In simple words, the actors that owned power plants did not have to install any new assets to use biomass. These actors could use existing burners for co-firing of biomass while producing electricity. The only relevant structure change was the establishment of the MEP rule, which gave financial support to burn biomass, where the actors burning biomass could benefit from the payoff. The authors further point out that the niche of wind electricity is far from the existing centralized power generation regime, as wind electricity is about decentralized generation and fluctuating availability. Furthermore, the authors point out that wind turbines have acquired negative symbolic meaning and resistance from local communities that is jeopardizing their further large-scale diffusion.

Given this analysis of the Verbong & Geels (2007) article through our TranScript framework, further we will discuss the added value of our framework.

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Added value of the TranScript framework

Using our TranScript framework to analyse a Transition Management paper, we will discuss the added value of our framework by elaborating each of the following points thereafter.

1. TranScript allows us to make a visual model of the system (with all the relevant assets, rules and technologies for transition). By doing this, we see that we have managed to open up the ‘regime black-box’, which is the central concept of the Transition management literature.

2. TranScript helps us to identify crucial rules for the transition. The AND/OR diagram reveals the crucial assets, and subsequently the crucial rules for transition.

3. By delivering us with possible alternative system configurations for the desired end-state, TranScript allows us to study different transition paths available.

4. By bringing ‘actors’ to the fore, TranScript offers a more policy-centered approach.

1. Opening the regime black-box

TranScript method allows us to make a visual model of the system – with all the relevant assets, rules and technologies for transition. We have created a graphical language with minimal syntax to describe the relevant structures and processes of the system.

Figure 7.9 shows all the relevant structures for transition. Such a visual model allows us to make meaningful inferences about the system. For example, it allows us quick insight into the landscape and regime level rules. Or even finding the rules that are driving the transition process. As seen from the figure, the Dutch climate & energy policy is shaped by industrial policy and security of supply. This makes it explicit that the aim of climate and energy policy is to ensure long term security of supply and not primarily reduce emissions. On the other hand, renewable electricity is shaped by the MEP rule, which determines the feed-in tariff for the electricity fed by these technologies back to the grid. There are no additional incentives to produce more, as renewable electricity will never make more money than black electricity as the aim of the MEP is to ensure that the cost of producing both types of electricity is even. This makes it explicit that the primary envisioned mechanism at work here is to make renewable electricity competitive with black electricity from fossil fuels. What is lacking is that there is no additional incentive to produce more renewable electricity.

By doing this, we see that we have opened the regime black-box. Regime is the central concept of the Transition Management literature, which grants stability to the STS. By making explicit the

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Chapter 7: Discussion and conclusions assets and rules that are relevant for transition, TranScript allows us to open the regime black-box. Figure 7.9, resulting from the application of TranScript, give an overview of the structures required for transition. In TranScript, regime can be conceptualized as Assets & Rules – in short the structures that need to be present in the desired end-state.

Figure 7.9: Overview of structures required for transition

2. Identification of crucial rules

The AND/OR diagram gives insights into the ways a renewable electricity system can be reached by revealing the crucial rules for the transition. The AND/OR diagram for the article is presented in figure 7.10, wherein it can be observed that during the development of wind electricity the processes establishing the assets of wind turbines and auxiliary power (as both have AND relation) are crucial processes and hence the rules shaping these processes will be crucial rules.

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Figure 7.10: AND/OR diagram

3. Delivering alternative system configurations

Transition Management describes the historical development of the system. This method reconstructs history, while TranScript makes alternative system configurations and transition paths explicit. TranScript delivers alternative system configurations for the desired end-state, thus allowing an analyst to scientifically elaborate what might have happened and how the system could have evolved differently. The AND/OR diagram presented in 7.10 shows that renewable electricity production can be carried out by three alternate transition pathways: wind, biomass and solar PV; and that the wind electricity pathway requires auxiliary back-up power capacity to balance windless periods. This gives us three different primary end-state system configurations for the transition towards renewable electricity.

4. Bringing actors to the fore to identify policy levers

In TranScript, actor actions (processes) drive the system development (by establishing structures). In Transition Management these actors are implicit, but our TranScript method forces us to identify and assign actors to each process. As each actor is driven by his or her intrinsic drivers

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Chapter 7: Discussion and conclusions it gives a clear idea to the policy analyst how to cater to these intrinsic drivers of different actors in order to nudge the transition of STS towards a desired end-state.

Contribution to the System Dynamics body of literature

In a similar vein we have analysed a System Dynamics paper, about the transition in the Dutch electricity system, by Yücel & van Daalen (2012). In this instance we will spare readers the details of the analysis and directly discuss the most relevant added value of our TranScript framework.

System Dynamics and our TranScript approach both address causal mechanisms. During the study of transitions System Dynamics posits a mechanism and analyses its influence on the establishment of new technology. The Yücel & van Daalen (2012) paper discusses the transition paths for the Dutch electricity system, where the building blocks of their analytical framework are actors and technology. In this framework, an actor’s decisions and actions produce investment and establishment of technology. As Yücel & van Daalen (2012) show in figure 7 on page 563, “Profitability of green generation” would lead to the investment in green generation technology by actors. This Profitability of green generation is affected by the so-called ‘negative or positive feedback loops’. These feedback loops are causal mechanisms; these are represented by the influence diagrams where each arrow represents a causal relationship. Through these feedback loops Yücel & van Daalen (2012) model the system development, and eventually the (technological) capacity establishment for green generation. For the benefit of the reader, this figure 7 on page 563 by Yücel & van Daalen (2012) is presented in figure 7.11.

Figure 7.11: System Dynamics model showing causal mechanisms (source: Yücel & van Daalen (2012))

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Chapter 7: Discussion and conclusions

In the above System Dynamics model Yücel & van Daalen (2012) indicate that the “Certificate prices” positively influence the “Profitability of green generation.” By doing this, the authors assume it is a regulated market and do not venture into explaining why such regulated market was created for green certificates in the first place. Furthermore it is not clear which rule(s) govern the certificate prices, and what the incentives of the actor are who developed these rules. As important it is to understand the impact of a mechanism it is equally important to understand the underlying rules and actors developing these mechanisms. For example, a market for green certificates will be useless if it is not properly regulated or CO2 emissions reductions are not enforced.

The added value of the TranScript approach is that it gives a detailed explanation why the causal mechanisms work, how and why these mechanisms were established and how they can be changed. What TranScript adds to this is that it shows that such regulated market has to be created by an actor and this market can further be tweaked. In TranScript each action of an actor is shaped by a rule. Such conceptualization gives an analyst a better understanding of the institutional changes within the system. This allows us to strengthen the recommendations of the authors – Yücel & van Daalen (2012). For example, Certificate Prices are shown to positively influence investment in green generation capacity. Herein by employing TranScript method, we would be able to point out which rules influence the development of this mechanism and what the incentives of the actors are that can influence these rules. This makes our approach actor-centered, or more policy oriented.

Furthermore TranScript gives insight into the hierarchy of rules within the system. As discussed in chapter 3, Williamson (2000) provides a useful framework for understanding the evolution of rules. This four-layer model aims at distinguishing between different levels of rules and the time required to bring about changes at each level. Between the levels, a vertical relation exists in which the higher level constrains and shapes the lower ones and similarly the lower level starts calling (pressuring) for changes in the levels above.

As identified on page 561, Yücel & van Daalen (2012) say that the supply-side policies operationalized via the SDE program has been towards boosting capacity investment for renewable generation. SDE supports renewable options via paying a subsidy equal to the gap between the average market price of electricity and the cost of renewable electricity generation. Through the multi-level concept of rules as understood through the TranScript approach we observe that SDE is influenced by the rule of the Dutch Climate and Energy policy at regime level, which in turn is influenced by the rules such as EU targets and security of supply at landscape level. This representation is shown in figure 7.12. Such hierarchy helps an analyst to understand that the rules do not exist in a vacuum and the rules at the lower level such as SDE are constrained and shaped by the rules at the higher level. They can be changed only if the higher level rules such as Dutch Climate and Energy policy, etc allow it to be changed or the actors capable of establishing these rules have enough incentives to change them.

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Chapter 7: Discussion and conclusions

Figure 7.12: Overview of structures required for transition

In sum, TranScript definitely does not subsume System Dynamics models, as it is a static description. Rather, it complements System Dynamics, and could assist a System Dynamics modeller/analyst to understand that some rules that maybe considered static and are part of a System Dynamics model, might actually be dynamic or at least changeable. With our above example of the certificate prices resulting from a regulated green certificates market, we have shown that with TranScript an analyst can bring such relevant rules to the fore. TranScript helps System Dynamics modellers at a higher level of analysis, by identifying rules behind each mechanism. Thus it helps in making system boundaries more explicit: as it always forces an analyst to identify the governing rule behind any mechanism and the actor that may be able to influence this rule. It is up to the modeller to decide whether to include such additional dynamics in the model.

Contribution to the Technology Innovation Systems body of literature

In chapter 2 we have identified Technology Innovation Systems (TIS) as one of the perspectives to study Transition. TIS is a framework developed within the scientific field of innovation studies which serves to explain the nature and rate of technological change. TIS allow us to analyse and evaluate the development of a particular technological system in terms of the structures and functions that support or hamper it. What can TranScript add to this perspective? To answer this

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Chapter 7: Discussion and conclusions question, we have analysed a TIS paper, about the transition of Biofuels in the Netherlands, by Suurs & Hekkert (2009).

TIS focus on structures and functions. On page 1004, Suurs & Hekkert (2009) define system functions as system-level variables that are to be understood as types of activities, or sets of activities, that influence the build-up of an innovation system. In the terminology of TranScript such functions are processes that bring about the development of new structures relevant for the transition. In TIS actors are part of the structures that carry out the processes. In this way TIS is actor-minded (acknowledges the role of actors/agency), but often does so implicitly. What TranScript adds to TIS is that it forces an analyst to consistently assign an actor to each process – thus presenting a clear picture about who the owner of that process is, and what incentives this actor has to carry out this process. Thus TranScript provides a formal notation for what remains qualitative in TIS.

For example, on page 1009, Suurs & Hekkert (2009) write that “in the rural province of Groningen, a public transport company starts a trial with bioethanol in buses”. In this case, the authors have explicitly identified an actor, who will carry out the process of establishing bioethanol buses. Based on this information, such process can be presented in the TranScript form as shown in figure 7.13, wherein the system condition “C” together with the rule “R” is calling on the Actor, in this case the Groningen Public Transport company, to employ Bioethanol buses.

Figure 7.13: Employ bioethanol buses

In the above example, Suurs & Hekkert (2009) explicitly identify the owner of the process. But they do not do this consistently throughout their analysis. On page 1009, for example they state that the biofuel niche in the Netherlands began in the rural province of Friesland, where two boating companies initiate adoption experiments with biodiesel.

Suurs & Hekkert (2009) write that “an important reason (for the adoption of biofuels in Friesland) is the increasing regulatory pressure with respect to the surface water quality,” without stating who the owner of this regulatory (rule making) process is. As TranScript explicitly requires us to identify the actor who produces the action and the rules that shape this action, we must make

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Chapter 7: Discussion and conclusions an assumption and assign actors to each process if and when they are not clearly mentioned. In this case additional research reveals that the actor is “Dutch National Government” and the rule shaping this process is “EU Water Framework Directive.” Although the Water Framework Directive was adopted in 2000, the need for developing a more comprehensive European water legislation had already been identified by the Council in 1988. It took nearly 10 years and several interim steps until the Commission finally published its first proposal in February 1997 (EC 2010). Since early 90’s many individual states were already taking measures to reduce surface water pollution.

Based on the above information, such process can be presented in the TranScript form as shown in figure 7.14, wherein the system condition of increasing surface water pollution together with the rule EU Water Framework Directive is calling on the actor, in this case the Dutch National government, to develop a framework to reduce surface water pollution.

Figure 7.14: Develop a framework to reduce surface water pollution

TranScript provides more rigor to the analysis done by TIS by demanding essentially from analysts to consistently identify and assign actors of all processes and not to do so selectively. In doing so, it allows an analyst to also identify contextual structures, which otherwise would have remained hidden or implicit. Making such contextual structures explicit is better as it gives a comprehensive understanding of the system dynamics. This can be seen by studying the impact of the Water Framework Directive on the development of the biofuels niche in the Netherlands. Usually rules in the surface water quality area would have been neglected while studying the development of the biofuels (or energy system) niche. But as TranScript forces an analyst to be consistently systematic, it brings to fore the relevance of contextual structures.

Furthermore, TranScript provides a formal language and consistent representation that would facilitate automated analysis to obtain system configurations and transition paths. So there is a future for TranScript in this kind of analysis using TIS. And what TranScript does is utmost consistent with TIS and therefore again we claim that we do not supplant TIS but supplement it.

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Chapter 7: Discussion and conclusions

Conclusions

The research question we posed for this thesis is,

What analytical framework will allow us to understand how transitions take place in an STS, especially how technical and institutional structures co-develop?

The framework (TranScript) as developed during this research is presented in figure 7.15. Our framework along with the methodology recommended for the application in chapter 3, has given us a robust language to analyse processes of structural changes in socio-technical systems.

Figure 7.15: Analytical Framework

By applying TranScript to all the three cases (chapters 4, 5 and 6) we were able to identify relevant structures required during the transition within the STS and the processes through which they were established. We applied our framework rigorously to build a system model for each case study; in short we have identified various system configurations of the desirable end-states. Each system configuration corresponds to one necessary condition required to bring about that particular transition. For example, figure 7.16 depicts the system configuration for the green hydrogen pathway for our first case – Greening of Gas. These system configurations could be used to answer what transition paths are there towards a desirable sustainable end-state, what actors have to be mobilized to realize these paths and what instruments are at the disposal of policy makers to mobilize the relevant actors.

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Chapter 7: Discussion and conclusions

Figure 7.16: Example of system configuration, displaying relevant structures

Validating our analytical framework

As presented in chapter 1, we have established three criteria to validate our framework:

o Conceptual soundness o Usability o Completeness

Below we will validate our framework on the basis of each criterion.

1. Conceptual soundness

We proposed that a framework is conceptually sound if there is a single and relatively unambiguous way of interpreting the diagrams and results.

As observed from the analysis of the three cases, it is clear that once we have developed the basic diagram of structures and processes (shown in part a of the figure 7.17), and the AND/OR diagram (part b) then the plotting of system configuration (figure 7.18, as an example we use green hydrogen from our VG2 case), with the requisite structures could be automated. These system configurations can be used to identify various transition paths leading us to the desired end-state.

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Chapter 7: Discussion and conclusions

Figure 7.17: a) Basic diagram with structures and processes. b) AND/OR diagram

Figure 7.18: Example of a system configuration

As a language TranScript is clear and transparent. In chapter 3 we have clearly defined the syntax for each element (actor, structure and process) of the framework. Additionally, we have grounded our concept of Rules in the existing and well embraced ADICO syntax. The ADICO syntax has helped us to capture the complex notion of rules. TranScript has allowed us to breakdown complex social structures and operationalize them as rules. Although we did not use ADICO to spell out each and every rule, it is evident that each rule used during our analysis can be written in ADICO format.

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Chapter 7: Discussion and conclusions

The analysis carried out during this research is systematic, as we consistently express in terms of boxes and arrows, to determine the relevant structures and processes relevant for transition towards the desired end-state. This helps us to produce the basic diagram (with structures and processes) and the AND/OR graph, and with the help of these diagrams system configurations are generated. As seen from figure 7.18, even the number of the arrow refers to the basic diagram of the analysis from which it was collected, and signifies which actor and what rule has shaped the development of what structure (either rule or asset). In short, an arrow is a condensed view of the structure building process, and each arrow has an actor that carries out this process. This underpins our statement that there is a smooth and unambiguous transition from basic diagram to system configuration.

2. Usability

TranScript allowed us to capture the essence of the cases at hand. The case analyses demonstrate that the conclusions follow the analysis – for example system configurations and follow from our basic diagrams (analytical framework) and the AND/OR diagrams. The end result is not only a model of the system with all the possible system configurations, but in addition it allows an analyst to infer some additional insights, for instance what the possible transition paths are towards the desired end-state. And given a transition path, what structures are needed to be established and what actors would develop these structures. This meets our primary requirements, and the objective of our research. TranScript was tested on three cases, with differences and similarities, and through each individual case analysis and the discussion provided earlier in this chapter we discern that our framework is wieldable.

Another strength of TranScript is that it is easy to use. As discussed in the first part of this chapter we can take a paper, where we have no direct knowledge of that case, systematically analyse it with TranScript and obtain relevant insights into the transition process. As highlighted in the earlier part of this chapter, applying TranScript provided additional insights when compared to the currently available methods to study transitions in STS.

3. Completeness

Our framework is complete in the sense that we can answer the research question posed in this thesis. From our analysis of the three cases and the discussion provided in the first part of this chapter (where we have analyzed 3 additional off-the shelf cases), we have demonstrated that the application of our framework leads to relevant insights into transitions in STS and it further enriches the case studies performed by other currently available techniques to study transitions. Secondly, with TranScript we can model any system without direct knowledge of that system and still obtain relevant insights. This demonstrates that we have not missed any important concepts.

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Chapter 7: Discussion and conclusions

TranScript follows the language of boxes and arrows, through a method that we have outlined in chapter 3. There are no additional elements used – just box, arrow and clear labeling (what is actor, rules, and processes). Using these elements through rigorous analysis insights into transition, such as system configurations and transition paths, are produced. The framework is elegantly simple, while at the same time being complete.

Reflection on the research process

There is usually a tension between the rigors of a methodological analysis (boxes, arrows and a procedure) and the so-called ‘soft’ analysis (asking questions, understanding, improving knowledge, etc.) (Foscarini 2010, Bhattacherjee 2012). Rigorous methodological analysis uses limited sets of concepts, or notations with a strict grammar, to answer closed-ended questions such as predict causal relations, etc. (Ross 1977). On the other hand, soft analysis uses qualitative research methods such as interviews, focus groups, and participant observation to answer open-ended questions that describe and explain relationships, individual experiences and group norms (Mack 2005). During this research we went through both worlds – rich, open-ended information-gathering ‘soft’ analysis and rigorous methodological analysis using TranScript.

TranScript follows the language of boxes and arrows, through a method that we have outlined in chapter 3. There are no additional elements used – just box, arrow and clear labeling (what is actor, rules, and processes). Using just these elements, TranScript allows us to carry out a systematic analysis of the cases at hand and garner insights into transitions.

Below, we will reflect on the reasons why such rigorous methodological analysis using TranScript works:

- TranScript is elegantly simple, while being complete. Just three boxes and two arrows and proper labeling can be used to plot a basic diagram. Such basic diagram captures the process of development of a new structure. Each basic diagram of TranScript can be considered similar to a LEGO block – wherein many such components can be assembled together to form a larger system (Gross 1996). Simplicity and usability of TranScript was highlighted in the first part of this chapter, when we selected three articles and were able to model the system and garner insights into the transition without direct knowledge of the case itself.

- A system model developed from TranScript is scalable, and size is not an issue. For instance, almost infinite numbers of basic diagrams can be used to form a system configuration diagram. The only limit is the system boundary. This is similar to IDEF0 models, where infinite models can be created from a single IDEF0 model depending on the analytical depth required (Austin, Morris et al. 1990, Buede 2009).

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Chapter 7: Discussion and conclusions

- There is a single and relatively unambiguous way of interpreting the diagrams and results. Similar to UML or IDEF0 it has both – syntax and semantics. There are rules regarding how the elements (boxes and arrows) can be put together and what they mean when they are organized in a certain way (Waltman and A 1993, Weyrath, Schinnerl et al. 2012).

- TranScript consistently forces an analyst to assign an actor to each process – thus presenting a clear picture about who the owner of that process is, and what incentives this actor has to carry out this process. Thus TranScript provides a formal notation to each process of development of a structure.

During the analysis of the three case studies and further analysis of the three journal articles, we saw how TranScript adds value and contributes to the existing methods in studying transitions. The factors listed above, which highlight the strengths of a rigorous methodological analysis using TranScript, played an important role in garnering insights into transition. However, throughout our analysis we observed that such insights would not have been obtained if it were not for the accompanying ‘soft’ information. Due to the knowledge of the accompanying ‘soft’ information from the field we were in a position to identify that a particular actor is pushing harder than some other actor, or a particular rule is influential than some other rule. This can be highlighted with two examples. Firstly, we will discuss the example of DHS case to highlight the importance of different actors and their perspectives. There were contracts (rules) and pipelines (assets) already in place that could ensure problem free operations of the plant. However, during one of the meetings with a problem owner, we observed that the problem was not about rules and assets, but about actors. Two actors within the system did not get along, hence the plant in question was desperate to find alternative solution to get rid of their waste heat. Secondly, we will discuss the example of hydrogen for public transport case to highlight the influence of one rule over other during decision making. During one open-ended interview with the problem owner, we learnt that there are many rules and regulations affecting the decision making process, but the most relevant of those that directly affect the investment decision making is emission standards. In case a new bus satisfies the ‘current most stringent emission standards’ then that bus is often selected.

Throughout our analysis we found out that this accompanying ‘soft’ information is the key to getting insights in transitions. The strength of TranScript was in making it explicit. Getting insights into transitions is not just drawing system configurations and AND/OR diagrams and saying that all transition paths are equally plausible, but it is important that these results of a methodological analysis are paired with soft information from the field. Socio-technical systems are complex and analysts would not garner insight unless they have field information. You need both worlds to make this happen, as they feed each other. Complexity within socio-technical systems cannot be captured by a single perspective, both richness and rigor are essential (Mikulecky 2001).

Now, we will reflect on the limitations of a rigorous methodological analysis using TranScript:

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Chapter 7: Discussion and conclusions

- TranScript is a static modeling tool, whereby it does not think on behalf of the analyst, and the analytical output is only as reliable as the analytical input (Hinde 2004, Redman 2012). Quality of the analysis depends on the skills of the analyst to use the analytical tool and their ability to interpret the results (Kneuper 1997, Hall 2005). For example, during our analysis of the TIS paper in the first half of this chapter we saw that by demanding essentially from analysts to consistently identify and assign actors of all processes TranScript allows them to also identify contextual structures, which otherwise would have remained hidden or implicit. This highlights the relevance of contextual structures – as a narrowly focused analysis would have neglected the rules in the surface water quality area while studying the development of the biofuels (or energy system) niche. However, one of the reasons TranScript was able to highlight the contextual structures is that because such information was mentioned in the analysis of the paper – TranScript just made it explicit. TranScript is an analytical tool, which is always as good as the information you feed to it and the applicability and usability of TranScript will be determined by the skills and knowledge of the analyst.

- Analysis of transitions in STS is done by people, and not by machines. No matter how ‘good’ an analytical tool is, it will only be successful if the analyst who are to use it are willing and able to do so (Kneuper 1997).

- TranScript allows an analyst to build a static model of dynamic transition processes. By the time such model is made, the system may have transitioned to another state, thus to some extent challenging the validity of the model itself.

- Some of the limitations are inherent in formalism itself: not all processes relevant to transition in STS can be handled formally, no matter how powerful the formalism is (Jackson 1987). STS are complex, multi-actor systems. For instance, it is extremely difficult to model in intrinsic motivations of different actors. This was highlighted in the example of the DHS case, where the assets and rules are in place for a problem free operation, but the actors in the system were the main problem .

From the above reflection about the strengths and limitations of rigorous methodological analysis using TranScript we see that both richness and rigor are indispensable. Rigor allows an analyst to make things explicit that may have otherwise remained hidden. Once again we would like to re-iterate that TranScript do not subsume other methods’ to study and analyse transitions in STS, but rather complement them as both richness and rigor are indispensable.

Future outlook for our framework

In the first part of this chapter we have discussed how TranScript adds new insights to the currently available techniques to study transitions in STS. During this discussion we have given specific recommendations to the analysts using the current techniques to further employ TranScript

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Chapter 7: Discussion and conclusions to obtain additional insights into the transition process. Below we will present general recommendations for future research based on our framework.

1. Generating Actor Network Diagrams through TranScript

The focus of this thesis is to create a framework that will help us to understand transitions in STS; in short to understand the process of structural changes in STS . During a transition new technical and institutional structures emerge. Hence during our analysis we have focused on mapping the technical structures – assets; and institutional structures – rules. This is apparent from our AND/OR diagram that is based on assets, and our system configuration diagram that is based on relevant assets and rules. However, throughout our analysis we have acknowledged the relevance of actors, as they are the drivers behind the processes that establish new structures relevant for transition (Giddens 1984, Naidoo 2008). Furthermore, actors’ actions are driven by their intrinsic drivers. In order to nudge the transition of STS towards a desired end-state, an insight into these intrinsic drivers of different actors is relevant (Brugha and Varvasovszky 2000). Such Actor Network Diagrams generating tool can be along the lines of the Dynamic Actor Network Analysis (DANA) tool developed at the Delft University of Technology (Bots 2003) that aids in modeling complex multi-actor system. In DANA perceptions of different actors are modeled as causal relations diagrams that show the factors and instruments they find to be of relevance.

Given the fact that TranScript requires an analyst to consistently assign an actor to each process – thus presenting a clear picture about who the owner of that process is and what its incentives are to carry out this process, future research could be conducted to study whether TranScript can be used to generate Actor Network Diagrams. Wherein, actors are the nodes and the edges are the dependency relations between different actors. For more information about such dependency relation, we refer you to figure 2.5. In that example we have highlighted the resource dependency relationship between A2 and A1, where A1 is dependent on A2 for this particular process.

Complementing our system configuration diagrams that presents relevant structures for transition, such Actor Network Diagrams can present relevant actors at landscape, regime and niche level. With regards to our AND/OR diagrams, which gives insight into crucial processes for transition, such Actor Network Diagrams can help us to identify the crucial actors for the transition.

2. Simultaneous analysis of two or more STS’s through TranScript.

Carrying further our discussion, from earlier in this chapter, where we observed that the increasing regulatory pressure with respect to the surface water quality influenced the diffusion of biofuels in the Netherlands (Suurs and Hekkert 2009). Usually rules in the surface water quality area would have been neglected while studying the development of the biofuels (or energy system) niche. This just highlights the complexity of transitions in STS. Simultaneous analysis of two or more STS might help in garnering further insight into the transition process.

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Chapter 7: Discussion and conclusions

Future research could focus on analysis of two or more STS simultaneously using TranScript, to study how the changes in structures in one STS affect the other. For example, during the analysis of the VG2 case study we discussed that because the Dutch Wobbe index is based on G-gas it potentially benefits both hydrogen and nitrogen technologies (Zachariah-Wolff, Egyedi et al. 2007). However, here both hydrogen and nitrogen are competing technologies. Once hydrogen is mixed with natural gas to create pseudo G-gas, there will be no need to mix nitrogen in the natural gas to lower the calorific value of the gas (Schouten, Janssen-van Rosmalen et al. 2006). Hence the cost recovery of existing nitrogen assets will be challenged, and the actors that have already invested in the nitrogen production assets will lobby to recover money. This may affect the development of hydrogen assets. Hence changes in structures in either STS could in fact affect the development of the other. This can be brought to the fore, by simultaneous analysis of two or more STS’s through TranScript.

3. Develop TranScript into an automated computer based analyst workbench

As argued throughout our research, once we have the basic diagrams through the application of TranScript, generation of the system configurations can be automated. System configurations give insight into the transition paths – insight into what the structures are that need to be established, and which actors would develop these structures and what the drivers are for these actors. Future research should focus on coding our simple but robust language of boxes and arrows to produce an automated computer based analyst workbench, where policy makers could input information about the structures and processes and automated system configurations giving insight into crucial processes and relevant rules are generated. Such development could be along the lines of Vensim analyst workbench used by system dynamics modelers (Ventana 2003).

Such development of an automated analyst workbench tool based on TranScript, will help analysts to save time during the modeling of the STS, and allow them to use this time better in analyzing the results and obtaining relevant insights into how the transition can be steered towards a desired end-state.

4. Elucidating transition patterns

During this research we have discussed transition and transition paths. Future research can focus on elucidating patterns of transition in STS, where a transition pattern is a generic grouping of transition paths.

The aim of such future research should be to study whether transition follows any generic pattern – depending on the types of actors and structures that are part of the STS (Geels 2005, Foxon, Pearson et al. 2013). For example, can we discern a transition pattern where a proven technology follows a certain type of path, and an unproven technology follows an “opposite” path. The aim is to analyze the characteristics of actors and structures within that STS to study if there is any correlation between these characteristics and diffusion of technology. Based on such pattern identification, governmental policies can be tweaked to support a particular type of technology in

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Chapter 7: Discussion and conclusions order to nudge the system development towards the desired end-state or steer away from an undesired end-state.

5. Take the framework back to the problem owner

Given the time constraint and the scope of this research, we did not take TranScript back to the problem owner, in our case policy makers, to assess whether the diagrams generated through TranScript themselves can be used to facilitate transition.

Of course as with any method – did we already knew what we found out. Are we just codifying intuition or generating new insight? Could we have reached the same insights without framework? Future research can take TranScript to policy makers and assess whether transitions in STS can be shaped towards the desired end-state through the insights generated via TranScript.

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Chapter 8: Reflection

Transitions are ubiquitous! Everything changes, as a general saying goes – the only constant in life is change. However, the important question is can transition be managed? Our answer is – probably. We observe that transitions can be stimulated or nudged, but they cannot be managed per se. Energy systems are complex, and characterized by multiple interactions between the social and technical components, hence the system development cannot be completely managed. However, significant insights into the transition can be garnered if the end-state is clearly defined. Such insight is paramount if we would like to nudge the system development towards the desired end- state. In this regard, the way sustainability is currently defined paints a very unclear picture of the end-state. The definition, as adopted by the United Nations, is fuzzy at best and does not give any information of what exact sustainability is and how should we pursue sustainable development. It is more like a big buzzword, where we know we want to pursue sustainable development but the exact necessary conditions are still unclear. To bring about the transition towards a sustainable energy system, a first step should be to clearly define the end-state and the necessary conditions.

As conceptualized in this research, an actor’s action drives the transition. Actors have intrinsic motivation to produce action, and carry out the process of establishment of new structures. It is important to understand the intrinsic motivations of the involved actors. This also ties back to the relevance of steering with information as an important instrument to bring about the transition towards a sustainable energy system. Next, we will take a helicopter view of the actors involved in our research, and what their intrinsic motivations are.

1. Actors and their intrinsic motivations

Actors produce actions that shape the development of new structures required for transition. Herein we will broadly classify actors into two categories – rule producing actors and asset producing actors. We will contrast these actors based on their driver for the actions they produce – money and public values. Money as a driver can be identified within the cases if the actor’s processes are shaped by the rules such as cost recovery, financial incentives and disincentives. Public value as a driver can be identified within the cases if actor’s processes are shaped by rules such as the rule of Kyoto protocol, security of supply, safety, etc.

Figure 8.1 plots the actors from the three cases in a matrix form, where the two types of actors are on the X-axis and the drivers for processes are on the Y-axis. To further distinguish between the three cases, actors denoted in circles are from the VG2 case, in rectangles are the actors from Hydrogen for Transport case and in hexagons are the actors from the DHS case

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Chapter 8: Reflection

Figure 8.1: Actors and their intrinsic motivations

As seen in the figure, rule producing actors with public values as a driver for their processes, are all public actors (in the bottom-left quadrant). A close look at the rules (by referring back to our case analyses) shaping their processes show that most of the rules are public value rules, such as the Kyoto Protocol at European Union or National government level; then security of supply and climate & energy policy at the national and city level. This is not surprising given the theme of our research, which is energy and sustainability. Furthermore, we see that there is one actor that can be seen playing an important role in all the three cases, which is the National Government. National Government has the capability to nudge the transition towards a desirable end-state via its Climate and Energy policies. In the Netherlands, the Dutch Climate and Energy policies has resulted into the rules of SDE+, EOS and TOP Sector as seen in VG2 and Hydrogen for Transport case. Similarly, Australian Climate and Energy Policy has resulted into the rules of CPRS, RET and CEI for the hydrogen for transport case. In both contexts these rules are developed to create incentives to invest in alternative fuel technologies. These are the primary mechanisms in all the three cases that have created incentives for asset producing actors (henceforth called as entrepreneurs) to develop new assets required for transition towards a sustainable system.

Entrepreneurial actors are in the top-right quadrant, and a close look (by referring back to our case analyses) indicates that their processes are shaped by the rules such as cost recovery and financial incentives and disincentives. For transitions in STS where social benefits have to be reaped, public actors have to step in. We observe that national governments still has an important

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Chapter 8: Reflection role to play during the transition. Neoliberal approach for governing claims that government should not interfere in the market operation, and the rules needed to make markets work already exist and are effective, and if there are deviations from optimality they cannot be remedied effectively by governments (Lall 2004). But as we are dealing with the transition theme of energy and sustainability for all the three cases we see that government and other public actors have a larger role to play. This might be due to the presence of multiple-actors, which bring in multiple intrinsic motivations (perspectives, goals, and motivations) and thus making it difficult to align these multiple goals and interests of different actors. Although, it is envisioned that pilot projects in the realm of sustainable energy system will begin at city level, city governments do not have the financial and political power to always successfully carry out such projects (Kousky and Schneider 2003). A national government has the ability to develop an institutional framework that would help city governments to manage such new and complex projects. National government has the capability to introduce new rules and change old rules to create alternative incentive structure to which the multiple actors can adapt their intrinsic motivations. City governments do not have the expertise nor the authority to change dominant rules and enforce them. New rules have to be anchored in a larger context, and enforced to ensure rules are being followed otherwise they would not be effective.

Secondly, entrepreneurial actors would not invest in assets where cost recovery is not possible. The motivation of an entrepreneurial actor is to make money; otherwise their survival is at stake. These are asset producing actors and we need them during the transition towards a sustainable energy system. The conclusion of the above discussion is that the rules that are produced (by rule producing actors) should not squeeze the entrepreneurial actors too much financially that there are no incentives for the entrepreneurs to invest in assets. The aim of the rule producing actors should be to make new rules that keep the “money” flowing for entrepreneurs and there are enough incentives for them to invest in and produce new assets required for the transition towards a sustainable energy system. The next section focuses on the instruments at the disposal of the rule producing actors to bring about transition.

2. Instruments to bring along transition

Intrinsic motivations shape actor’s desire to take actions to build new structures and these actions are shaped by rules. Such distinction is important to show that just changing the rules of the STS will not automatically bring about the transition towards a desirable end-state.

We will use this opportunity to highlight additional quality of our framework wherein we can use our analytical framework in conjunction with other prevalent framework to garner insights into the working of an STS. We will use the example of types of National policy instruments as presented by the Intergovernmental Panel on Climate change (IPCC), which was established by the United Nations Environment Program (UNEP). According to Barker (2007) there are four different types of National Policy Instruments to guide the transition towards a sustainable energy system: Regulatory standards; Voluntary agreements; Financial instruments; and Information policies (Barker T. 2007).

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Chapter 8: Reflection

As observed in our analysis regulatory standards, such as emission standards, have been instrumental in reducing emissions from the transport sector as well as innovation in engine technology. Pertaining to diesel buses, innovations were not just restricted for engine technology but also the diesel fuel that is used, wherein low-sulphur diesel was developed to reduce harmful emissions.

Consider the example of the public transport buses, where mandatory emission standards to reduce PM and NOx have been proven effective, while voluntary agreements to reduce CO 2 emissions have not been effective as they were intended to be. This shows the importance of Or else (going back to the ADICO format for rules). When rules are implemented, there should be a way to enforce the Or Else, otherwise some actors may be tempted not to comply with the rule or abuse the rule thus defeating its purpose. One practical example to highlight this issue is the Spanish nighttime solar energy fraud; where between November 2009 and January 2010, 4500 megawatt hours (MWh) of solar energy were sold to the electricity grid between midnight and seven in the morning (Ecologist 2010). It was suspected that the plant operators used diesel generators connected to their solar panel arrays to illegally benefit from government subsidies (Montaño 2010).

Next we have the financial instruments. As observed, investing actors will not invest in non- cost-recovery project. Financial incentives can be in the form of subsidies (SDE+, EOS and TOP Sector in the Netherlands or CEI in Australia). Financial incentives allow subsidization of the costs of alternative fuels and make them competitive with incumbent fossil fuels. For example, the subsidies available for biogas under the Dutch SDE program have given a big fillip to the biogas industry in the Netherlands. Recently Gasunie has signed agreements with local parties in the region of Overijssel to produce biogas on a larger scale that will be fed into the high-pressure pipelines of the Dutch natural gas system. It will be the first time that green gas has been fed directly into the national gas transmission grid, and it represents a key step in making the Dutch natural gas system more sustainable. Financial support is important in creating a level playing field between alternative and fossil fuel technologies and in keeping the flow of money for entrepreneurs.

Prevalent understanding is that if there are social benefits to be reaped then public actors have to step in and tax payers have to pay. We agree that the public actors play an important role if social benefits are to be reaped, but we do not agree that always the tax payers have to pay. For the instruments such as SDE+, EOS or CEI tax payers money is used to support alternative fuel technologies, but we see another popular instrument where the industry themselves decide which actor pays. This is the tradable permits financial instrument. According to Barker (2007) tradable permits are an increasingly popular economic instrument to control emissions wherein the volume of emissions allowed determines the carbon price and the environmental effectiveness of this instrument, while the distribution of allowances has implications for competitiveness (Barker T. 2007). The difference between how tradable permits and subsidies such as financial incentives work is that in case of subsidies the entire society (in the form of tax payers) have to pay. However, in case of tradable permits, only the part of the society that consumes a particular product or service has to pay. This can be explained by the example of transport. Transport sector produces emissions.

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Chapter 8: Reflection

Government can subsidize clean and low emitting technologies by giving financial incentives for entrepreneurs to invest in clean alternative fuel technology. In this case entire society will share the burden of such subsidy. On the other hand if the transport sector is brought within tradable permits regulation then there will be a new market for CO2 emissions for the transport sector will be created. And entrepreneurial actors would be able to find the most cost-effective way to reduce their emissions. Of course these extra costs will be transferred to the customer, but only the part of the society using these transport services have to share the burden of these additional costs.

Tradable permits are introduced in the Netherlands through the EU ETS and in Australia through the CPRS framework. The aim is to encourage actors to implement cleaner technologies to reduce their emissions or else they have to pay. Secondly, actors successfully reducing their emissions can trade their leftover permits to other actors who need them. These permits have created a carbon price thus making investment in non-carbon technologies even more attractive, by creating a flow of money for entrepreneurs.

On the flip side a price on carbon has increased costs for industry located in Australia and European Union, which might be a point of concern as the entrepreneurial actors can decide to move to a country where such costs on carbon are not yet implemented. We operate in a global world and there is no stopping large industries to move to a place where their operation costs are low. Hence we see a trade-off between carbon reduction and maintaining economic competitiveness. This ties back to our main message that there should be flow of money to encourage entrepreneurs to invest in assets, if they are squeezed too much from a financial standpoint, they will move to other location where they can recover the cost of their assets easily.

Another important instrument we would like to highlight is the one of steering with information, where the government can change actor’s thinking structure and intrinsic motivations through information. This is a special type of instrument. The above three instruments we discussed are rules that produce external pressures to shape actor’s actions. However, this instrument of steering with information is not a rule; it is implemented to shape the intrinsic motivations of different actors. This ties back to our discussion in section 2.4, wherein we proposed that there should be two ways to produce desirable structures by actors. Firstly, actor’s actions can be shaped by external pressures driven by rules to produce desirable structures. Secondly, actor’s intrinsic motivations can be influenced so that actor would produce the desirable structure.

The relevance of this instrument can be pointed out from our VG2 and Hydrogen for transport case example. With increasing awareness of hydrogen as a transport fuel, the transport sector has positioned itself as a leading sector to implement hydrogen as an energy carrier. In case of Hydrogen, pilot projects such as CUTE buses have helped the cause for public acceptance of hydrogen. As seen from our survey results perception of hydrogen as a green fuel is quite positive. Furthermore, such pilot projects aid in research and development and enhance the associated socio- technical knowledge and learning about a technology. Improved awareness about alternative fuel technologies can show different actors, Look what’s possible! Knowledge and information dissemination must include everything from alternative fuel availability, advantages, disadvantages,

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Chapter 8: Reflection government incentives and support systems, etc. She second example: energy labelling of household appliances (lamps, washing machines, etc) have helped to increase the sales of these appliances.

To sum-up we recommend that if we aspire to achieve sustainable energy system, we have to first clearly define the end-state and the corresponding necessary conditions. Once such end-state is clearly defined, rule-making actors should aim at creating rules that create a flow of money for the entrepreneurial actors. Such flow of money should create incentives for entrepreneurs to invest in assets that will bring about the transition towards a sustainable energy system.

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Index

Index Multi-level perspective , 13, 14, 23, 164 A N ADICO , 17, 18, 27, 28, 29, 30, 33, 142, 154, 184 Analytical framework , 6, 7, 8, 24, 25, 31, 32, 34, 37, 41, Niche , 5, 11, 12, 13, 14, 17, 19, 23, 32, 37, 64, 73, 131, 138, 70, 83, 109, 126, 135, 140, 141, 143, 153, 182, 183, 184, 139, 146, 147, 159, 168, 171, 174, 176 200 AND/OR diagram , 32, 34, 35, 36, 71, 72, 76, 101, 102, R 103, 121, 122, 132, 133, 134, 141, 142, 147, 184, 186, 189 Regime , 13, 14, 16, 23, 73, 130, 131, 132, 136, 147, 164, Assets , 15, 19, 25, 26, 33, 35, 45, 49, 58, 65, 73, 87, 88, 168, 173 121, 133, 183 Renewables , 1, 5, 167, 169, 179, 182 Research methodology , 32, 37 B Research process , 7, 125, 144 Research question , 6, 8, 140, 143, 182, 190 Bandwagon , 3, 5, 11, 12, 50 Rules , 15, 17, 18, 19, 25, 26, 31, 33, 63, 69, 93, 99, 100, Basic diagram, 32, 141, 143, 144, 184, 186, 189 133, 142, 161, 168, 183, 201

C S Complexity , 5, 12, 70, 147, 171, 176, 179, 182, 204, 206 Social structures , 3, 7, 29, 142, 182, 183 Structure and process , 7, 24, 142 D STS , 3, 4, 5, 6, 7, 11, 12, 13, 15, 16, 17, 19, 21, 23, 25, 26, 30, 31, 32, 36, 125, 132, 135, 140, 143, 146, 147, 148, District Heating System, 107, 157, 162, 202 149, 152, 153, 182, 183, 185, 190 Sustainable development, 2 E System configuration diagram , 32, 79, 144, 147, 186, 189 System dynamics , 23, 79, 139, 148, 173 Energy infrastructures , 3, 11 T G Technical structures , 3, 7, 13, 15, 19, 32, 147, 182, 183 Greening of Gas case study , 37 Technology Innovation System , 24 TranScript, 25, 26, 27, 32, 36, 37, 76, 79, 105, 124, 125, 126, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, H 142, 143, 144, 145, 146, 147, 148, 149, 183, 184, 185, Hydrogen for Transport , 37, 151, 152, 185 187, 188, 189, 190 Transition , 7, 9, 2, 4, 5, 6, 7, 8, 11, 12, 13, 19, 21, 22, 23, 24, 25, 26, 30, 31, 32, 33, 34, 35, 36, 37, 39, 40, 41, 44, K 59, 62, 69, 70, 71, 72, 73, 76, 77, 78, 79, 81, 82, 87, 99, Kyoto, 2, 5, 18, 21, 28, 31, 42, 43, 44, 46, 47, 55, 58, 85, 86, 101, 102, 103, 105, 107, 108, 120, 121, 122, 124, 125, 110, 111, 112, 119, 151, 152, 160, 162, 165, 170, 178, 126, 131, 132, 133, 134, 135, 137, 138, 139, 140, 141, 180 143, 144, 145, 146, 147, 148, 149, 151, 152, 153, 156, 164, 168, 169, 175, 176, 179, 180, 182, 183, 184, 185, 187, 188, 189, 190 L Transition Management , 7, 14, 16, 23, 125, 126, 132, 134, 169, 175, 176 Lock-in , 3, 4, 5, 11, 12, 31, 73, 178 Transition paths , 24, 36, 76, 79, 106, 124, 140, 144, 148, 185, 187, 189, 190 M Multi-actor , 5, 146, 147, 182, 201

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Summary

Introduction

Large systems, such as the energy system, are socio-technical systems (STS) – as they combine social and technical components that interact and function together . Here social structures include institutions such as regulations, norms, heuristics, etc; and the technical structures include assets such as machinery, pipes, buildings etc. These structures facilitate processes such as the production of energy, the transportation and distribution of energy, and the control and regulation of the energy system.

A sustainable energy system is paramount for future generations to prosper. Much of the global- scale environmental degradation visible today is due to the adverse effects of energy production, conversion and usage. When coal, gas and oil are burnt, they release carbon dioxide, which is a contributor to the greenhouse effect by trapping heat in the atmosphere and causing global warming. Renewables refer to a form of energy which is an alternative to the traditional fossil fuels and nuclear power. Although renewables currently play a very minor role in satisfying the primary energy demand, they can be expected to play a larger role in an energy system of the future given their potential, as clean and safe energy resources. There is such a diversity of choices that the exploitation of renewables, if carried out in the context of sustainable development, could provide a far cleaner energy system while at the same time conserving scarce fossil fuel resources.

Changing the energy system towards sustainability implies a transition. Transition towards a sustainable energy system is a complex multi-actor problem. The complexity exists due to the interactions between the various components of an STS. Secondly, the presence of multiple actors with different interests makes it difficult to shape the transition, as different actors attempt to steer changes into their own desired direction. It is not always clear where and how the change process should start and which actors should take the lead, if any. We observe that the wide adoption of renewables has not yet taken place and that policy makers are in need of tools to help them understand where to nudge the system, to bring about the required changes.

Research question

Current dominant views on transitions are centered on the system level dynamics, where the emphasis is on an aggregated view of the system. We see a gap in the literature, especially a framework or tool that creates a roadmap for transition. A study that maps out structural changes during transitions in an STS through intermediate stages is missing. We hypothesize that systematic analysis of the structures and processes within an STS will give us an insight into the transition process. If we could garner insight into this, we would know which actors control or are influenced by such structures, and which incentives or disincentives would thus mobilize such actors to nudge

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Summary the transition towards a sustainable energy system. The problem as viewed in this research is that we do not know the exact steps to take in order to bring about the desired transition towards a sustainable energy system. We would, if we had a better understanding of transition phenomena within an STS. The research question we addressed is:

What analytical framework will allow us to understand how transitions take place in an STS, especially how technical and institutional structures co-develop?

The contribution of this research will be the development of an analytical lens and a tool that will give insight into the transition in energy STS. It is an actor-centered approach, which will help in identifying policy levers by giving a clear idea to policy makers how to cater to the intrinsic drivers of different actors in order to nudge the transition of STS towards a desired end-state.

Analytical framework

Our working definition for transition is that it is a process through which one or more new, significantly different, structures are established. We define technical structures as assets , and social structures as rules that are established to facilitate (constrain and enable) the behavior of actors. Both assets and rules are actor-devised. In this research we conceptualise structure as something static, which guides something dynamic that is the process. Although structures are static only within a chosen time frame, we conceptualize them as dynamically static or stable where they are changeable over time. This quality of dynamic stability ensures that structures within an STS can change over time and transition is possible. Structures (both Assets and Rules) facilitate processes within the system. A structure within the context in which it is implemented, facilitates a process that produces the intended output.

The analytical framework as developed during this research is shown in figure 1. As this framework is intended to script transitions, through detailed structural analysis along with their accompanying actors and processes, we name it TranScript. TranScript captures the relationship between the actors, structures and processes – where actors create structures, but at the same time actors’ actions (processes) are facilitated by structures (more specifically, rules). The external pressures, modulated by the rules of the system, create drivers (incentives or disincentives) for actors to perform actions in order to develop a structure. This new structure, emerging from actions, can be either a technical (assets) or an institutional (rules) structure. During our analysis we focus only on structures facilitating processes, as this will bring about transition. Thus, processes such as production, maintenance, etc that are facilitated by assets are not included in our analysis. We assume that actors use assets to produce output, and the reason to produce an asset is to make money. Hence, if an actor cannot make money from an asset, over time such assets disappear.

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Summary

Figure 1: Analytical Framework – TranScript

Methodology

We follow the following six steps to use our analytical framework:

1. Identify the necessary conditions for a transition towards a sustainable energy system 2. Translate each necessary condition into corresponding sub-conditions 3. Apply the analytical framework, TranScript, to identify the actors that have the ability to influence these structures, and the drivers required to motivate these actors 4. Plot all assets to get an overview of the total system in an AND/OR diagram 5. Produce system configuration diagrams along with the relevant structures for transition 6. Interpret the system configuration diagrams, to outline the conditions under which transition would take place.

The above six steps allow us to produce the required basic diagram of structures and processes (shown in part a of figure 2), and the AND/OR diagram of assets (part b). All the assets in the system are presented as an AND/OR diagram, where the required assets are shown as AND , and the alternate assets are shown as OR . OR implies that either lower level assets may be established for higher level assets to occur, and AND implies that both lower level assets must be established for higher level assets to occur.

Figure 2: a) Basic diagram with structures and processes. b) AND/OR assets diagram

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Summary

Once we have the basic and the AND/OR diagrams, then the plotting of system configuration (figure 3), with the required structures (both assets and rules) for transition can be carried out. For the delineation of rules , we use “ADICO” grammatical syntax. The ADICO syntax is an acronym that stands for five subcomponents of an institutional structure: Attribute (A), Deontic (D), aIm (I), Condition (C), and Or else (O). Where Attribute is a holder for an actor to whom the rule applies to; Deontic is a holder for the three modal verbs using deontic logic (may – permitted, must – obliged and must not – forbidden); aIm is a holder that describes particular actions or outcomes to which the deontic is assigned; Condition is a holder for those variables which define when, where, how and to what extent an AIM is permitted, obligated and forbidden; and Or else is a holder for those variables which define the sanctions to be imposed for not following a rule.

For simplicity we use a short-hand notation in the figure, where Rule 1 shaping Rule 2 actually implies that Rule 1 shapes the processes that develop Rule 2. Here we denote a transitive relation, where the direction of the arrow indicates that the first structure was influential in driving or shaping the development of the second structure. An arrow is a short-hand for structure building and signifies which actor and what rule has shaped the development of what structure (either rule or asset). Bolded (boundaries for) boxes in the figure present the assets and normal boundaries present the rules to be established for transition. System configurations could be used to answer what transition paths are there towards a desirable sustainable end-state, what actors have to be mobilized to realize these paths and what instruments are at the disposal of policy makers to mobilize the relevant actors.

Figure 3: System configuration diagram presenting the relevant structures for transition

Application and results

During this research we use TranScript to analyze three different case studies, each with a focus on energy transition:

Case 1: The Greening of Gas (VerGroening Van Gas, VG2) case explores the feasibility of mixing and transporting hydrogen via the Dutch natural gas network. Case 2: The Hydrogen for Transport case focuses on using hydrogen for public transport buses. Case 3: The District heating system (DHS) case studies the feasibility of using residual industrial waste heat for district heating for a city in the Netherlands.

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Summary

By applying TranScript to all the three cases we are able to identify relevant structures required during the transition within the STS and the processes through which they are established. To show TranScript in action, we will walk the reader briefly through the analysis and results of our Case 1: The Greening of Gas (VG2) case study. Similar results are observed for the other two cases. For the VG2 case, we identify two necessary conditions, which are: We need to have excess hydrogen capacity in place; and we need to be able to feed hydrogen into the existing natural gas network and to have end-user appliances that are compatible with the hydrogen and natural gas mixture.

We start by opening up the first necessary condition box – of creating excess hydrogen capacity. Figure 4 gives an overview of the assets required for creating excess hydrogen capacity. As seen from the figure hydrogen production can be carried out in three ways: black hydrogen, nuclear hydrogen and green hydrogen. Furthermore, while producing black hydrogen, the captured CO2 can either be sequestered or supplied to industry. Similarly, other necessary condition box could be further opened to give an overview of assets required for that particular condition.

Figure 4: AND/OR diagram for the first necessary condition of excess hydrogen capacity

The system configuration diagram for green hydrogen, is shown in figure 5, which gives an overview of structures required to bring about this necessary condition. Similar system configuration diagrams can be plotted for black and nuclear hydrogen. In this system configuration

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Summary diagram, bolded boundaries for boxes are assets and normal boundaries for boxes are rules. Furthermore, an arrow is a short-hand for that particular structure building process, and the direction and number of the arrow is collected from our case analysis (corresponding basic diagram of structures and processes). For the purpose of this summary, we will assume that arrows 1-8 matches to the corresponding basic diagram that signifies which actor and what rule has shaped the development of what structure.

Figure 5: System configuration diagram for green hydrogen

TranScript, as it facilitates in generating AND/OR diagrams and system configurations of the desired end-state, allows us to carry out a thought experiment to see what the general transition paths are for this case. The notion of transition paths entails time, wherein the sequence of establishment of structures is relevant. As conceptualized in this thesis, a transition path is a sequence of structural changes during a transition. Such structural changes could be either investment in assets or bringing about changes in rules. It is an underlying TranScript assumption that no structures are changed or new ones are created unless an actor acts. This implies that actors should have incentives to bring about these structural changes. In general, TranScript allows us to discuss which structures could be potentially established first, and which would follow, during such transition. Aim of this discussion is to address the question – how can this transition come about? Our guiding principle is to look for incentives, and identify the actors that will benefit from them to take an action. We start by looking at the system configurations that are produced through TranScript to address the question, what incentives do actors have to act.

A quick interpretation of the system configuration diagrams, as shown in figure 5, illustrate that at the present state there is an activity in the area of investment in Green Power assets. In the

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Summary

Netherlands, primarily such Green Power assets are wind mills to generate wind power. Our analysis has shown that the rule of SDE+ feed-in tariff (arrow 4) has created incentives for actors to invest in assets to produce wind power. Proliferation of wind power has created additional dynamics and two different types of external pressures. Firstly, it has created incentives to invest in auxiliary power assets (arrow 7) to account for windless periods. This process is shaped by the rules of security of supply and safety, which are established to ensure reliable, uninterrupted and safe energy supply to the consumers. On the other hand it has created incentives to invest in power to hydrogen assets (arrow 8) to account for excess wind power. Such green hydrogen can be mixed and transported via the natural gas network and the concerning actors can benefit from the feed-in tariff for this green hydrogen. This process is shaped by the rules of SDE+ and Cost Recovery, which ensure that the actors investing in wind power and power to hydrogen assets can get return on their investments. At the present state, without any additional incentives, the above transition is already shaping up and creating pressures for additional structural changes in the energy system.

As wind power is characterized by fluctuations, conventional power capacity is used as auxiliary power during windless periods and to enable system balancing. As mentioned, SDE+ rule has created incentives for actors to invest in wind power capacity. However, higher the proliferation of wind power the higher the amount of time these conventional power plants will be off-line. Furthermore, one of the primary incentive for an actor to invest in any asset is the cost recovery principle, where actors would like to get return on their investment. This can only be achieved if that investment keeps on operating – in this case wind mill keeps on generating power. So when wind mills generate power other conventional power production capacity providing auxiliary power have to be turned off-line, which is determined by the rule of the merit-order (arrow 5). Due to the rule of the Merit-order, wind power replaces conventional power, thus implying that the primary objective of the actor that has invested in these conventional power producing assets is not being met. If these assets are underutilized the concerned actors would not have any incentives to invest (not limited to investment in new assets, but investing in the maintenance of the existing ones) in these assets and they might be dismantled and shipped off to China or other developing countries.

The Dutch energy system cannot survive solely on the basis of fluctuating wind power. Conventional power plants, which provide on-demand power, are necessary to have a balanced power network. It is not only important to have green energy but it is equally important to have a balanced power system that can be sustained. Proliferation of wind power, has created tensions in the system, to bring about changes in existing structures or the establishment of new structures. For example, conventional power plant owners, who are losing out on their return on investment, will lobby to change certain rules as proliferation of wind power has reduced the operating capacity of conventional power plant assets. These actors can lobby to the Dutch Government to change SDE+ rule in order to include Black Hydrogen. This will allow them to improve the return on investment on their assets. This is one of the transition paths, where these actor lobby to the Dutch Government to change the rule SDE+, but there might be another transition path, where these actors lobby to the actor Dutch Government to establish a new rule that helps them to recover their costs (for example: direct financial pay-off).

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Summary

The above discussion shows how, by using TranScript, we can think through transition paths. Now we see TranScript in action. It only comes to life when we start thinking about what is going to happen and at every point when the story stops for lack of incentives, as an analyst we consider an occurrence of an event or a change of a rule that can create incentives for actors to act. We assume similar mechanisms will occur for other structural changes.

Validation

We validate our framework on the basis of the following three criteria; each of them is elaborated thereafter:

• Conceptual soundness • Usability • Completeness

Conceptual soundness A framework is conceptually sound if there is a single and relatively unambiguous way of interpreting the diagrams and results. The case analysis performed during this research is systematic, as we consistently express in terms of boxes and arrows, to determine the relevant structures and processes relevant for transition towards the desired end-state. Once we have the basic diagram (with structures and processes) and the AND/OR diagram, system configurations can be generated. As seen from figure 5, even the arrow number corresponds to the basic diagram of the analysis from which it was collected. This underpins our statement that there is a smooth and unambiguous transition from a basic diagram to a system configuration.

Usability The case analyses demonstrate that the conclusions follow the analysis – for example system configurations follow from our basic and AND/OR diagrams. The end result is not only a model of the system with all the possible system configurations, but in addition it allows an analyst to infer

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Summary some additional insights, for instance what the possible transition paths are towards the desired end-state. And given a transition path, what structures are needed to be established and what actors would develop these structures. This meets our primary requirements, and the objective of our research. TranScript was tested on three cases, with differences and similarities, and through each individual case analysis we conclude that our framework is wieldable.

Completeness TranScript follows the language of boxes and arrows, through a method that we have outlined. Using these elements through rigorous analysis yields insights into transition, such as system configurations and transition paths. The framework is elegantly simple, while at the same time being complete. TranScript is complete in the sense that we can answer the research question posed in this thesis. From our analysis of the three cases, and of further application to other case studies reported in literature, we demonstrate that the application of our framework leads to relevant new insights into transitions in STS and it is complimentary to the currently available techniques to study transitions

Conclusion

Our framework (TranScript) along with the methodology recommended for the application , has given us a robust language to analyse processes of structural changes in socio-technical systems. By applying TranScript rigorously to three cases we are able to build a system model for each case study; in short we identify various system configurations of the desirable end-states. These system configurations could be used to answer what transition paths are there towards a desirable sustainable end-state, what actors have to be mobilized to realize these paths and what instruments are at the disposal of policy makers to mobilize the relevant actors. It thus supports policy makers in understanding where to nudge the energy system, to bring about the required changes towards a future sustainable energy system.

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Samenvatting

Introductie

Grote infrastructurele systemen, zoals het energiesysteem, zijn socio-technische systemen (STSen): ze combineren sociale en technische componenten die met elkaar interacteren. Sociale structuren omvatten instituties zoals regelgeving, normen, en vuistregels; de technische structuren omvatten activa zoals machines, leidingen, en gebouwen. Deze sociale en technische structuren faciliteren processen zoals de productie van energie, het transport en de distributie van energie, en de controle en regulering van het energiesysteem.

Een duurzaam energiesysteem is van groot belang voor de welvaart en het welzijn van toekomstige generaties. Een groot deel van de huidige wereldwijde milieuproblematiek is te wijten aan de negatieve gevolgen van de productie, de omzetting, en het gebruik van fossiele brandstoffen. Bij de verbranding van kolen, gas, en olie komt koolstofdioxide vrij, dat een bijdrage aan het broeikaseffect levert. Hernieuwbare energiebronnen bieden een alternatief voor traditionele fossiele brandstoffen en kernenergie. Hoewel duurzame energie op dit moment een zeer ondergeschikte rol speelt in het aanbod van primaire energie, mag worden verwacht dat duurzame energie een grotere rol zal spelen in een toekomstig energiesysteem, aangezien het om schone en veilige energiebronnen gaat. Er is zo een enorme verscheidenheid aan keuzes voor de exploitatie van hernieuwbare energiebronnen, dat deze kunnen bijdragen aan een veel schoner energiesysteem, terwijl tegelijkertijd schaarse fossiele brandstoffen worden gespaard.

De overgang van het huidige energiesysteem naar een duurzaam systeem wordt aangeduid met het woord transitie. De verandering, of transitie, naar een duurzame energiehuishouding is een complex, multi-actor probleem. De complexiteit ligt in de interacties tussen de verschillende componenten van een STS. De aanwezigheid van meerdere actoren met verschillende belangen bemoeilijkt de transitie, aangezien de actoren de wijzigingen in hun eigen gewenste richting proberen te sturen. Het is niet altijd duidelijk waar en hoe het veranderingsproces moet beginnen en welke actoren het voortouw moeten nemen. De brede toepassing van duurzame energie heeft nog niet plaatsgevonden en beleidsmakers hebben behoefte aan instrumenten die hen kunnen vertellen waar het systeem een duwtje moet krijgen om de gewenste veranderingen te laten ontstaan.

Onderzoeksvraag

De huidige dominante visie op transities is gericht op de dynamiek rondom de hogere niveaus van het systeem, waarbij de nadruk ligt op een geaggregeerd beeld. We constateren een hiaat in de literatuur, in het bijzonder waar het gaat om het scheppen van een conceptual raamwerk of

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Samenvatting instrument dat een richtlijn voor interventies op microniveau geeft. Ook ontbreekt er onderzoek naar structurele veranderingen – en de bijbehorende tussenstappen – tijdens de transitie van een STS. Onze hypothese is dat de systematische analyse van de structuren en processen binnen een STS ons inzicht in het transitieproces zal geven. Met behulp van dit inzicht, kunnen we te weten komen welke actoren invloed hebben op, of beïnvloed worden door, dergelijke structuren, en welke positieve of negatieve prikkels die actoren nodig hebben om de verandering naar een duurzame energiehuishouding te bewerkstelligen. Het probleem is dat we niet weten welke exacte stappen genomen moeten worden om de gewenste transitie te laten ontstaan. Dat zouden we wél kunnen weten, als we een beter inzicht in de overgangsverschijnselen van een STS zouden hebben. De onderzoeksvraag die we daarom stellen is:

Welk analytisch raamwerk stelt ons in staat om te begrijpen hoe transities in een STS plaatsvinden, met name hoe de technische en institutionele structuren zich samen ontwikkelen?

De bijdrage van dit onderzoek is de ontwikkeling van een analytische lens; een instrument dat inzicht geeft in de transities van energie-STSen. Het is een actorbenadering, die helpt bij het identificeren van beleidsinstrumenten, door beleidsmakers een beeld te geven van de intrinsieke drijfveren van de verschillende actoren.

Analytisch raamwerk

De gehanteerde werkdefinitie voor transitie is dat het om een proces gaat, waarbij een of meer nieuwe, sterk verschillende, structuren tot stand worden gebracht. We beschouwen activa als technische structuren regels die zijn vastgesteld om het gedrag van actoren te bevorderen danwel te beperken als sociale structuren. Zowel de activa als de regels zijn door actoren bedacht. In dit onderzoek beschouwen we structuren als statische eenheden, die vorm geven aan dynamische processen. Hoewel structuren alleen binnen een bepaalde termijn statisch zijn, beschouwen we ze als dynamisch statisch of stabiel als ze in de loop van tijd kunnen veranderen. Deze kwaliteit van dynamische stabiliteit zorgt ervoor dat de structuren binnen een STS kunnen veranderen. Wanneer een structuur (regels of activa) binnen de context van een STS wordt geimplementeerd, faciliteert die structuur een process dat een gewenste output moet produceren.

Het analytisch raamwerk dat gedurende dit onderzoek ontwikkeld is, is weergegeven in figuur 1. Aangezien dit raamwerk een 'script' voor transities levert, met behulp van gedetailleerde structurele analyse en een beschrijving van de bijbehorende actoren en processen, noemen we het TranScript. TranScript beschrijft de relatie tussen de actoren, structuren, en processen. Actoren creëren structuren, en deze activiteiten (processen) worden zelf ook weer gefaciliteerd door structuren (regels). De externe krachten, geleid door de regels van het systeem, zorgen dat actoren drijfveren (positieve of negatieve) prikkels krijgen om een structuur te ontwikkelen. De nieuwe structuur bestaat op haar beurt weer uit een technische structuur (activa) en een institutionele structuur (regels). Tijdens onze analyse richten we ons alleen op structuren die processen faciliteren die leiden tot een transitie. Zo horen processen voor de productie en onderhoud van

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Samenvatting activa niet in onze analyse. We nemen aan dat actoren activa gebruiken om te produceren, en dat de reden om te produceren is om geld te verdienen. Dus, als een actor activa niet kan gebruiken voor het genereren van inkomsten, dan zullen deze activa na verloop van tijd verdwijnen.

Figuur 1: Analytisch raamwerk

Methodologie

We volgen deze zes stappen in het gebruik van ons analytisch raamwerk:

1. Identificeer de noodzakelijke voorwaarden voor een transitie naar een duurzame energiehuishouding. 2. Vertaal elke noodzakelijke voorwaarde in corresponderende sub-voorwaarden. 3. Pas het analytische raamwerk, TranScript, toe zodat de actoren die de mogelijkheid hebben om deze structuren te beïnvloeden geïdentificeerd worden, samen met de drijfveren voor de motivatie van deze actoren. 4. Teken alle activa in een overzicht van het totale systeem in een EN / OF diagram. 5. Produceer systeemconfiguraties, samen met de relevante structuren voor de transitie. 6. Interpreteer de systeemconfiguratiediagrammen, om de voorwaarden waaronder de overgang zou plaatsvinden te beschrijven.

Met de bovenstaande zes stappen kunnen we het vereiste basisdiagram van structuren en processen (weergegeven in figuur 2a) en het EN / OF diagram van de activa (figuur 2b) genereren. Alle activa in het systeem worden weergegeven in een EN / OF diagram, waarbij de vereiste activa worden getoond als EN en de alternatieve activa worden getoond als OF. OF impliceert dat op een lager niveau activa kunnen worden gerealiseerd voordat activa op een hoger niveau worden gerealiseerd, en EN houdt in dat beide activa op een lager niveau moeten worden gerealiseerd voordat activa op een hoger niveau worden gerealiseerd.

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Samenvatting

Figuur 2: a) Basisdiagram met structuren en processen b) EN/OF activa diagram

Als we eenmaal het basisdiagram en het EN / OF schema hebben gemaakt, dan kan de systeemconfiguratie met vereiste structuren (zowel activa als regels) worden getekend (figuur 3). Voor de afbakening van de regels gebruiken we de "ADICO" grammaticale syntax. De ADICO syntax is een acroniem dat staat voor vijf subcomponenten van een institutionele structuur: Attribute (Kenmerk), Deontic (Verplichting), aIm (Doel), Condition (Voorwaarde), en Or else (Of anders). Kenmerk geeft de actor aan op wie de regel van toepassing is; Verplichting staat voor de drie werkwoorden in de deontische logica (mag – een recht, moet – een plicht, en mag niet – een verbod); Doel beschrijft bepaalde acties of uitkomsten die door de verplichting worden aangewezen; Voorwaarde beschrijft de variabelen die bepalen wanneer, waar, hoe en in welke mate een doel wordt toegestaan, verplicht of verboden; en Of anders is een beschrijving van de variabelen die sancties vaststellen voor het niet volgen van een regel.

Voor de eenvoud gebruiken we een korte notatie in figuur 3, waarbij de pijl tussen regel 1 en regel 2 betekent dat regel 1 de processen vormt die regel 2 tot stand brengen. Hier geven we een transitieve relatie aan, waarbij de richting van de pijl aangeeft dat de eerste structuur invloedrijk is voor de ontwikkeling van de tweede structuur. Een pijl is een korte notatie voor structuur bouwen en geeft aan welke actor en welke regel van belang zijn geweest voor de ontwikkeling van de structuur (regels of activa). Vette randen in de figuur geven de activa weer, normale randen geven de regels die voor de transitie nodig zijn. Systeemconfiguraties kunnen worden gebruikt om te beantwoorden welke transitiepaden mogelijk zijn, welke actoren moeten worden gemobiliseerd om deze paden te realiseren, en welke instrumenten beleidsmakers hebben om de relevante actoren te mobiliseren.

Figuur 3: Het systeemconfiguratiediagram toont de relevante structuren voor de transitie

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Samenvatting

Toepassing en resultaten

Tijdens dit onderzoek gebruiken we TranScript voor de analyse van drie verschillende case studies, elk met een focus op energietransitie.

Case 1: De Vergroening van Gas (VG2) casus kijkt naar de haalbaarheid van het bijmengen en transporteren van waterstof via het Nederlandse aardgasnet. Case 2: De waterstof voor Transport casus richt zich op het gebruik van waterstof voor het openbaar vervoer (in bussen). Case 3: De stadsverwarmingscasus (DHS) beschrijft de haalbaarheid van het gebruik van industriële restwarmte voor stadsverwarming in een stad in Nederland.

Door TranScript in alle drie de cases toe te passen, kunnen we identificeren welke structuren nodig zijn voor de transities binnen de STSen en de processen waardoor deze transities tot stand komen. Om de werking van TranScript te laten zien, nemen we de lezer aan de hand langs de analyse en de resultaten van onze Case 1: de Vergroening van Gas (VG2). Vergelijkbare resultaten zijn waargenomen voor de andere twee cases. Voor de VG2 casus identificeren we twee noodzakelijke voorwaarden, te weten: (1) overtollige waterstofcapaciteit moet aanwezig zijn; (2) we moeten waterstof kunnen invoeden in het bestaande aardgasnet, en de apparatuur van eindgebruikers moet geschikt zijn voor het waterstof/aardgasmengsel.

We beginnen met het de eerste noodzakelijke voorwaarde: het creëren van overvloedige waterstofcapaciteit. Figuur 4 geeft een overzicht van de vereiste activa voor het creëren van overvloedige waterstofcapaciteit: “zwarte” waterstof, nucleaire waterstof en “groene” waterstof. Zoals blijkt uit de figuur kan de productie van waterstof op drie manieren worden uitgevoerd. Daarnaast kan tijdens de productie van “zwarte” waterstof de ontstane CO2 worden afgevangen of aan de industrie geleverd. Op een zelfde manier kan iedere andere noodzakelijke voorwaarde beschreven worden om een overzicht van de benodigde activa te geven.

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Samenvatting

Figuur 4: EN / OF schema voor de eerste noodzakelijke voorwaarde van een overvloedige waterstofcapaciteit

Het systeemconfiguratieschema voor groene waterstof wordt getoond in figuur 5, waarin een overzicht van noodzakelijke voorwaarden gegeven wordt. Vergelijkbare systeemconfiguraties kunnen worden getekend voor zwarte en nucleaire waterstof. In dit systeemconfiguratiediagram, geven vette randen de activa en normale randen de regels weer. Daarnaast geeft een pijl een specifiek structuurvormend proces weer. De richting en de nummering van pijlen komt voort uit de analyse van de casus (overeenkomstig het basisschema van structuren en processen). In deze samenvatting gaan we ervan uit dat de pijlen 1-8 overeenkomen met het bijbehorende basisdiagram, dat aangeeft welke actor en welke regel verantwoordelijk zijn voor de ontwikkeling van welke structuur.

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Samenvatting

Figuur 5: Systeemconfiguratiediagram voor groene waterstof

Door het genereren van EN / OF schema's en systeemconfiguraties van de gewenste eindsituatie, stelt TranScript ons in staat om via een gedachte-experiment te zien wat mogelijke transitiepaden zijn. De notie van transitiepaden behelst ook tijd en de benodigde volgorde voor de totstandkoming van structuren. Zoals toegepast in dit proefschrift, is een transitiepad een opeenvolging van structurele veranderingen gedurende een overgangsperiode. Dergelijke structurele veranderingen kunnen zowel investeringen in activa als veranderingen van regels zijn. TranScript veronderstelt dat er geen structuren worden gewijzigd of nieuwe worden gemaakt, tenzij er een actor betrokken is. Dit houdt in dat actoren prikkels voor structurele veranderingen moeten krijgen. TranScript stelt ons in staat om te bepalen welke structuren mogelijk als eerste worden veranderd en welke tijdens een dergelijke transitie zouden volgen. Het doel van deze discussie is om te beschrijven hoe deze overgang tot stand kan komen. We gaan op zoek naar de drijfveren die actoren ertoe brengen om actie te ondernemen. We beginnen door te kijken naar de systeemconfiguraties die we met behulp van TranScript genereren. De vraag hierbij is: wat voor drijfveren hebben actoren om te handelen?

Een interpretatie van de systeemconfiguratiediagrammen, zoals in figuur 5, illustreert dat er op dit moment veel geïnvesteerd wordt in Green Power activa. In Nederland zijn deze Green Power activa met name windmolens die windenergie genereren. Onze analyse heeft aangetoond dat de regel van het SDE+ feed-in tarief (pijl 4) prikkels heeft gecreëerd voor actoren om te investeren in windenergie-activa. De verspreiding krachten van windenergie heeft geleid tot extra dynamiek: twee verschillende externe krachten. Ten eerste heeft het geprikkeld om te investeren in extra vermogen activa (pijl 7) in verband met de windstille periodes. Dit proces wordt gedreven door de

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Samenvatting regels van voorzieningszekerheid en veiligheid, die zijn ontstaan om betrouwbare, ononderbroken en veilige elektriciteitsvoorziening voor de consument te garanderen. Aan de andere kant heeft het geprikkeld om te investeren in zogenaamde “power-to-hydrogen” activa (pijl 8) in verband met perioden van overtollige windenergie. Dergelijke groene waterstof kan worden gemengd en getransporteerd via het aardgasnet. De betreffende spelers kunnen profiteren van het feed-in tarief voor deze groene waterstof. Dit proces wordt gedreven door de regels van de SDE+ en kostendekking, die ervoor zorgen dat de actoren die in windenergie en waterstof-activa investeren rendement op hun investeringen kunnen krijgen. Op dit moment vindt de beschreven transitie al plaats, zonder enige extra prikkels, en leidt zodoende tot extra druk voor additionele structurele veranderingen in het energiesysteem.

Aangezien windenergie gekenmerkt wordt door schommelingen, wordt de capaciteit van conventionele centrales als hulpvermogen tijdens windstille periodes ingezet. De SDE+ regel zorgde voor prikkels voor actoren om te investeren in windenergie. Echter, hoe meer windenergie er komt, hoe langer de conventionele elektriciteitscentrales uitgeschakeld zullen blijven. Een van de belangrijkste redenen voor een actor om te investeren in activa is kostendekkende exploitatie: de actoren willen rendement op hun investering krijgen. Dit kan alleen worden bereikt als die investering operationeel blijft; dus als de windmolen stroom blijft opwekken. Als windmolens elektriciteit genereren, moet conventionele productiecapaciteit worden uitgeschakeld, hetgeen wordt bepaald door de regel van de “merit-order” (pijl 5). Als gevolg van deze regel vervangt windenergie conventionele energiecentrales, zodat aan de primaire doelstelling van een actor die geïnvesteerd heeft in conventionele elektriciteitscentrales niet wordt voldaan. Als deze activa worden onderbenut, hebben de betrokken actoren geen prikkels meer om te investeren (zowel in het bouwen van nieuwe activa, als in het onderhoud van de bestaande). Deze activa kunnen worden ontmanteld en verscheept naar China of andere ontwikkelingslanden.

Het Nederlandse energiesysteem kan niet alleen voortbestaan op basis van fluctuerende windenergie. Conventionele elektriciteitscentrales, die op verzoek vermogen kunnen leveren, zijn noodzakelijk voor een evenwichtig elektriciteitsnetwerk. Niet alleen groene energie is dus van belang, maar ook het beschikbaar houden van balancerend vermogen. De proliferatie van windenergie heeft tot spanningen in het systeem geleid, die nopen tot veranderingen in de bestaande structuren of het aanbrengen van nieuwe structuren. Zo zullen eigenaren van conventionele elektriciteitscentrales, die het rendement op hun investeringen zien dalen, zullen lobbyen om bepaalde regels te veranderen. Deze actoren kunnen bijvoorbeeld bij de regering lobbyen om de SDE+ regel te veranderen, zodat “zwarte” waterstof hier ook onder valt. Zo kunnen zij mogelijkerwijs hun rendement op investeringen verbeteren. Dit is een van de mogelijke transitiepaden, waarbij deze lobby de SDE+ regel hoopt te veranderen. Een ander mogelijk transitiepad bestaat er uit dat deze lobby de Nederlandse regering ertoe zet om een nieuwe regel in te stellen, die hen helpt om hun kosten te recupereren (bijvoorbeeld: door een directe financiële vergoeding).

De bovenstaande discussie laat zien hoe we, met behulp van TranScript, kunnen nadenken over transitiepaden. TranScript komt pas tot leven als we nadenken over wat er gaat gebeuren. Op elk

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Samenvatting moment dat het verhaal stopt bij gebrek aan prikkels, kunnen we als analist bekijken welke gebeurtenis of een verandering van een regel leidt tot prikkels die actoren tot handelen aanzetten.

Voor de VG2 casus was het probleem om de transitie tot stand te brengen van het bestaande aardgassysteem in Nederland, naar een systeem dat een mengsel van waterstof en aardgas aankan. Uit onze analyse krijgen we enerzijds inzicht in de structuren die nodig zijn voor de transitie naar een gewenste eindtoestand. Anderzijds kunnen we interpreteren welke structuren waarschijnlijk (of minder waarschijnlijk) zullen veranderen. Het eerste deel blijkt duidelijk uit onze analyse en kan direct worden afgeleid uit het EN / OF schema en het systeemconfiguratiediagram. Het tweede deel volgt echter niet rechtstreeks uit de TranScript analyse, maar uit een interpretatie van de analyse en de bijbehorende schema's. Het is belangrijk hier op te merken dat TranScript geen voorspelling geeft van wat er gaat gebeuren, maar het geeft ons een systematische aanpak om na te denken over mogelijke transitiepaden.

Validatie

Wij valideren ons raamwerk op basis van de volgende drie criteria:

• Consistentie • Bruikbaarheid • Volledigheid

Consistentie

Een raamwerk is conceptueel consistent als het een unieke en eenduidige manier van interpreteren van de schema's en de resultaten biedt. De analyse van cases in dit onderzoek, om de relevante structuren en processen te bepalen, is systematisch, aangezien we onze bevindingen consequent uitdrukken in termen van blokken en pijlen. Als we eenmaal het basisschema (met structuren en processen) en het EN / OF diagram hebben gemaakt, kunnen systeemconfiguraties worden gegenereerd. Zoals blijkt uit figuur 5, komt het nummer van de pijl overeen met het basisschema van de analyse waaruit ze werden verkregen. Dit ondersteunt onze stelling dat er een soepele en eenduidige vertaling van een basisschema naar een systeemconfiguratie mogelijk is.

Bruikbaarheid

De cases tonen aan dat de conclusies volgen uit de analyse: systeemconfiguraties volgen uit onze basis- en EN / OF schema's. Het eindresultaat is niet alleen een model van alle mogelijke systeemconfiguraties, maar daarnaast kan een analist ook aanvullende inzichten genereren, zoals de mogelijke transitiepaden naar het gewenste eindsituatie. Van deze transitiepaden kan vervolgens worden bepaald welke structuren moeten worden gerealiseerd, en door welke actoren. Dit voldoet aan onze primaire behoeften en daarmee de doelstelling van ons onderzoek. TranScript werd getest

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Samenvatting op cases met verschillen en overeenkomsten. Door middel van elke afzonderlijke (succesvolle) analyse concluderen we dat ons raamwerk bruikbaar is.

Volledigheid

TranScript volgt de taal van blokken en pijlen, via de geschetste methode. Met behulp van deze elementen krijgt men inzicht in transities, systeemconfiguraties en transitiepaden. Het raamwerk is elegant eenvoudig en tegelijkertijd volledig. TranScript is volledig in de zin dat we de in dit proefschrift gestelde onderzoeksvraag kunnen beantwoorden. Op basis van onze analyse van de drie cases en van de verdere toepassing op andere case studies in de literatuur, tonen we aan dat het gebruik van ons raamwerk leidt tot relevante en nieuwe inzichten in de transities van STS en dat onze aanpak complementair is aan de huidige beschikbare technieken om transities te bestuderen.

Conclusie

Ons raamwerk TranScript, en de daarbij horende methodiek, geeft ons een taal om processen van structurele veranderingen in socio-technische systemen te analyseren. Door het toepassen van TranScript waren we in staat om een systeemmodel voor drie cases te bouwen; we identificeren verschillende systeemconfiguraties van gewenste eindsituaties. Deze systeemconfiguraties kunnen worden gebruikt om aan te geven welke transitiepaden er in de richting van een wenselijke, duurzame eindsituatie zijn, welke actoren moeten worden gemobiliseerd om deze paden te realiseren, en welke instrumenten beleidsmakers ter beschikking hebben om de relevante actoren te mobiliseren. Het raamwerk ondersteunt dus de beleidsmakers om te begrijpen waar het energiesysteem een duwtje nodig heeft om de transitie in de richting van een toekomstig duurzaam energiesysteem tot stand te brengen.

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About the author

Anish Patil was born on 4 April 1977 in Salbardi, India. He received his Bachelor of Engineering degree in Mechanical Engineering from the University of Pune (India) in 1998. Following that he went to the United States for his further education and received a Masters of Science in Business Administration at the University of Memphis, USA in 2000 and a Masters of Engineering in Management of Technology from the Vanderbilt University, USA in 2003.

In 2003, Anish moved to the Netherlands to pursue his doctoral studies at the Delft University of Technology. His doctoral research focused on developing an analytical framework that will allow us to understand how transitions take place in socio-technical systems. During his research period he also was a visiting researcher at the School of Management, at Queensland University of Technology in Australia.

Since 2010, Anish has been working as a business development manager with Proton Ventures, Netherlands. Focus of his work is to develop Proton’s NFuel concept, which is based on decentralized production of Ammonia (or other value added products) from surplus or stranded energy resources.

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List of publications

Journals

Anish Patil, Paulien Herder and Kerry Brown. Investment decision making for alternative fuel public transport buses – Case of Brisbane Transport. In: Journal of Public Transportation. Vol 13, No. 2. 2010

Anish Patil, Austine Ajah, Paulien Herder (2009). Recycling industrial waste heat for sustainable district heating: a multi-actor perspective. International Journal of Environmental Technology and Management (IJETM) Volume 10 - Issue 3/4 - 2009

Kas Hemmes, Anish Patil and Nico Woudstra, Flexible Co-Production of Hydrogen and Power using Internal Reforming SOFC System. ASME Fuel Science and Technology Journal. Vol 5, No. 4, 2008

A. N Ajah, A. C. Patil, P. M. Herder and J. Grievink, Integrated Conceptual Design of a Robust and Reliable Waste-Heat District Heating System. Applied Thermal Engineering. Vol 27, No 7, pp 1158- 1164, 2007

Ajah A.N.; A.C. Patil and P.M. Herder: Robust Conceptual Design of a Residual Industrial Waste- Heat District Heating System, Chemical Engineering Transactions, Vol 7, pp 85-90, 2005.

Conferences

Patil, A., Lucas Laumans and Hans Vrijenhoef (2013). Solar to Ammonia – via Proton’s NFuel units. 2nd International Symposium on Innovation and Technology in the Phosphate Industry [SYMPHOS 2013], Agadir, Morocco.

Patil, A. (2012). Ammonia: an Energy Buffering Solution for the Future. 9th Annual NH3 Fuel Association Conference San Antonio.

Anish Patil, Hans Vrijenhoef and Ioanna Aslani (2011) Ammonia – Fuel for the Future. Low Carbon Energy Summit, Dalian, China. 19-26 October.

Anish Patil and Paulien Herder (2010) Changing the Rules of the Game to Influence the Diffusion of Alternative Fuels. 33rd IAEE conference, Rio de Janeiro, Brazil. 6-9 June

Anish Patil (2009) Mixing and Transportation of Hydrogen via the Natural Gas Network in Rozenburg. 32nd IAEE Conference - Energy, Economy, Environment: The Global View, San Francisco. 21-24 June.

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List of publications

Anish C. Patil and Kerry Brown (2008) Trends in Emission Standards and the Implications for Bus Fleet Management: Technology Assessment for Brisbane Transport. Next Generations Infrastructure conference - Building Networks for a Brighter Future, Rotterdam. 10-12 November

Anish Patil and Wouter Meijers (2008) Investing in new public transport buses – decision making in the face of uncertainties. WCEAM Beijing. 28-30 October.

Anish Patil and Kerry Brown (2008). Scenario Analysis to Assist Brisbane Transport in Achieving 2026 Patronage and Clean-Air Targets. In the proceedings of the The Twelfth Annual Conference of the International Research Society for Public Management, held at Brisbane, Australia. March 26-28

Patil, A.C.: Transition towards a Greener Energy System: Hydrogen based fuel for Transport, pp. 111-121. In: Proceedings of the Oikos Ph.D. summer Academy 2007: Sustainability, Innovation and Entrepreneurship Aug. 20-24 (2007). At: Urnäsch, Switzerland. [s.l.]: Oikos International, 2007. Eds.: Hamschmidt, Jost.

Patil, A.C.; A.N. Ajah and P.M. Herder: Trends in Emission Standards for Public Transport Buses: How Low should they go, pp. 1-12. In: Proceedings of the 2007 IAEE Asian Conference: Asian Energy Security and Economic Development in an Era of High Oil Prices 5-6 November 2007. At: Taipei, Taiwan, ROC. [s.l.]: IAEE, 2007. Eds.: Yunchang Jeffrey Bor.

Patil, A.C. and P.M. Herder: Efficient Energy System: a Multi-Actor Analysis and Modelling Approach, pp. 1-5. In: Proceedings of the International Conference and Exhibition Joint Conference with The International Solar Energy Society ISES, Renewable Energy 2006: Advanced Technology Paths to Global Sustainability, 9-13 October (2006). At: Chiba, Japan. Eds.: Yoshihiro Hamakawa, Kosuke Kurokawa and Yogi Goswami. International Conference (refereed)

Patil, A.C.: Transition towards a sustainable energy system, 11 sheets. Presentation at the 5th technology, Management and Policy Graduate Consortium Annual Meeting June 25-27 (2006). At: Lisbon, Portugal. International Presentation

Patil, A.C.; A. Ajah and P.M. Herder: Sustainable District Heating System: A Multi-Actor Perspective, pp. 1-8. In: Proceedings of the EIC Climate Change Technology Conference 2006, May 10. At: Ottawa, Canada. [s.l.]: IEEE. Eds.: John Grefford, P.Eng. ISBN: 1-4244-0218-2. International Proceeding (refereed)

Patil, A.C.; Garbacki, PJ and P.M. Herder: An Analytical Approach to Correlating World Development Indicators, pp. 1-15. In: Proceedings of the III Scientific Conference on Economic Globalization and Environmental Policy 25/26 May (2006). At: Warsaw, Poland. Eds. International Proceedings (refereed)

Patil, A.C.; P. Garbacki and P.M. Herder: The Hydrogen Economy – Potential & Reality. In: Posters of the International Conference and Exhibition Joint Conference with The International Solar Energy Society ISES, Renewable Energy 2006: Advanced Technology Paths to Global Sustainability, 9-13 October (2006). At: Chiba, Japan. Eds.: Yoshihiro Hamakawa, Kosuke Kurokawa and Yogi Goswami. International poster

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List of publications

Anish C. Patil, Paulien M. Herder & Margot Weijnen: Actionable Solutions to Tackle Future Energy Uncertainties, In: Proceedings of the IEEE Conference on Systems, Man, and Cybernetics, Oct. 10th-12th 2005. At: Hawaii, USA.

Patil, A.: Dutch Energy System in Transition, pp. 1-10. In: Proceedings of the 5th BIEE Academic Conference, Sept. 22nd-23rd 2005. At: Oxford, UK.

Zachariah, J.L; K. Hemmes and A. Patil: The Effect of Knowledge on the Public Acceptance of Hydrogen and Its Potential Applications in the Netherlands Results of a Survey, pp. 1-9. In: Proceedings of the International Hydrogen Energy Congress and Exhibition (IHEC 2005). At: Istanbul, Turkey, July 13th -15th, 2005. Istanbul: IHEC, 2005.

Patil, A.C. and P.M. Herder: Dutch Natural Gas Market: Past, Present and Future, pp. 1-12. In: Proceedings of the 28th Annual IAEE International Conference, June 3rd-June 6th, 2005. At: Taipei, Taiwan.

Hemmes, K.; A. Patil and N. Woudstra: Internal Reforming SOFC System for Flexible Co production of Hydrogen and Power, pp. 1-6. In: Proceedings of the 3rd International Conference on Fuel Cell Science, Engineering and Technology, May 23-25, 2005. At: Ypsilanti, Michigan, USA.

Patil. A.C. and P.M. Herder: Energizing the future - Case of Dutch energy system, pp. 208-213. In: Proceedings of the IASTED International Conference on Energy and Power Systems - EPS2005, April 18th - 20th, 2005. At: Krabi, Thailand.

Hemmes, K; Patil, A & Zachariah, JL: Flexible Co-Production of Hydrogen and Power using Fuel cells. International Gas Research Conference, 1-4 November 2004. Vancouver, Canada.

Van den Bosch, S; Molin, E; Hemmes, K; Zachariah, JL; Patil, A; Caspar C; Wouter, B and Dragutiovic, N: Public Acceptance of Hydrogen in the Netherlands: Results of a Survey. In: Proceedings of the World Hydrogen Energy Conference, 27 June - 2 July 2004. Yokohama, Japan.

Correlje, A.; Hemmes, K; Patil, A and Zachariah, JL: The Transition to Hydrogen in Europe, Framing the Complexity in Markets, Institutions and Technology. In: Proceedings of the International Conference on Hydrogen in Europe, 23-24 June 2004. Bruges, Belgium.

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NFInfra PhD Thesis Series on Infrastructures

NGInfra PhD Thesis Series on Infrastructures

1. Strategic behavior and regulatory styles in the Netherlands energy industry Martijn Kuit, 2002, Delft University of Technology, the Netherlands. 2. Securing the public interest in electricity generation markets, The myths of the invisible hand and the copper plate Laurens de Vries, 2004, Delft University of Technology, the Netherlands. 3. Quality of service routing in the internet: theory, complexity and algorithms Fernando Kuipers, 2004, Delft University of Technology, the Netherlands. 4. The role of power exchanges for the creation of a single European electricity market: market design and market regulation François Boisseleau, 2004, Delft University of Technology, the Netherlands, and University of Paris IX Dauphine, France. 5. The ecology of metals Ewoud Verhoef, 2004, Delft University of Technology, the Netherlands. 6. MEDUSA, Survivable information security in critical infrastructures Semir Daskapan, 2005,Delft University of Technology, the Netherlands. 7. Transport infrastructure slot allocation Kaspar Koolstra, 2005, Delft University of Technology, the Netherlands. 8. Understanding open source communities: an organizational perspective Ruben van Wendel de Joode, 2005, Delft University of Technology, the Netherlands. 9. Regulating beyond price, integrated price-quality regulation for electricity distribution networks Viren Ajodhia, 2006, Delft University of Technology, the Netherlands. 10. Networked Reliability, Institutional fragmentation and the reliability of service provision in critical infrastructures Mark de Bruijne, 2006, Delft University of Technology, the Netherlands. 11. Regional regulation as a new form of telecom sector governance: the interactions with technological socio-economic systems and market performance Andrew Barendse, 2006, Delft University of Technology, the Netherlands. 12. The Internet bubble - the impact on the development path of the telecommunications sector Wolter Lemstra, 2006, Delft University of Technology, the Netherlands. 13. Multi-agent model predictive control with applications to power networks Rudy Negenborn, 2007, Delft University of Technology, the Netherlands. 14. Dynamic bi-level optimal toll design approach for dynamic traffic networks Dusica Joksimovic, 2007, Delft University of Technology, the Netherlands.

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15. Intertwining uncertainty analysis and decision-making about drinking water infrastructure Machtelt Meijer, 2007, Delft University of Technology, the Netherlands. 16. The new EU approach to sector regulation in the network infrastructure industries Richard Cawley, 2007, Delft University of Technology, the Netherlands. 17. A functional legal design for reliable electricity supply, How technology affects law Hamilcar Knops, 2008, Delft University of Technology, the Netherlands and Leiden University, the Netherlands. 18. Improving real-rime train dispatching: models, algorithms and applications Andrea D’Ariano, 2008, Delft University of Technology, the Netherlands. 19. Exploratory modeling and analysis: A promising method to deal with deep uncertainty Datu Buyung Agusdinata, 2008, Delft University of Technology, the Netherlands. 20. Characterization of complex networks: application to robustness analysis Almerima Jamaković, 2008, Delft University of Technology, Delft, the Netherlands. 21. Shedding light on the black hole, The roll-out of broadband access networks by private operators Marieke Fijnvandraat, 2008, Delft University of Technology, Delft, the Netherlands. 22. On stackelberg and inverse stackelberg games & their applications in the optimal toll design problem, the energy markets liberalization problem, and in the theory of incentives Kateřina Staňková, 2009, Delft University of Technology, Delft, the Netherlands. 23. On the conceptual design of large-scale process & energy infrastructure systems: integrating flexibility,reliability, availability,maintainability and economics (FRAME) performance metrics Austine Ajah, 2009, Delft University of Technology, Delft, the Netherlands. 24. Comprehensive models for security analysis of critical infrastructure as complex systems Fei Xue, 2009, Politecnico di Torino, Torino, Italy. 25. Towards a single European electricity market, A structured approach for regulatory mode decision-making Hanneke de Jong, 2009, Delft University of Technology, the Netherlands. 26. Co-evolutionary process for modeling large scale socio-technical systems evolution Igor Nikolić, 2009, Delft University of Technology, the Netherlands. 27. Regulation in splendid isolation: A framework to promote effective and efficient performance of the electricity industry in small isolated monopoly systems Steven Martina, 2009, Delft University of Technology, the Netherlands. 28. Reliability-based dynamic network design with stochastic networks Hao Li, 2009, Delft University of Technology, the Netherlands.

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29. Competing public values Bauke Steenhuisen, 2009, Delft University of Technology, the Netherlands. 30. Innovative contracting practices in the road sector: cross-national lessons in dealing with opportunistic behaviour Mónica Altamirano, 2009, Delft University of Technology, the Netherlands. 31. Reliability in urban public transport network assessment and design Shahram Tahmasseby, 2009, Delft University of Technology, the Netherlands. 32. Capturing socio-technical systems with agent-based modelling Koen van Dam, 2009, Delft University of Technology, the Netherlands. 33. Road incidents and network dynamics, Effects on driving behaviour and traffic congestion Victor Knoop, 2009, Delft University of Technology, the Netherlands. 34. Governing mobile service innovation in co-evolving value networks Mark de Reuver, 2009, Delft University of Technology, the Netherlands. 35. Modelling risk control measures in railways Jaap van den Top, 2009, Delft University of Technology, the Netherlands. 36. Smart heat and power: Utilizing the flexibility of micro cogeneration Michiel Houwing, 2010, Delft University of Technology, the Netherlands. 37. Architecture-driven integration of modeling languages for the design of software-intensive systems Michel dos Santos Soares, 2010, Delft University of Technology, the Netherlands. 38. Modernization of electricity networks: Exploring the interrelations between institutions and technology Martijn Jonker, 2010, Delft University of Technology, the Netherlands. 39. Experiencing complexity: A gaming approach for understanding infrastructure Geertje Bekebrede, 2010, Delft University of Technology, the Netherlands. 40. Epidemics in Networks: Modeling, Optimization and Security Games. Technology Jasmina Omić, 2010, Delft University of Technology, the Netherlands. 41. Designing Robust Road Networks: A general method applied to the Netherlands Maaike Snelder, 2010, Delft University of Technology, the Netherlands. 42. Simulations of Energy Transitions Emile Chappin, 2011, Delft University of Technology, the Netherlands. 43. De ingeslagen weg. Een dynamisch onderzoek naar de dynamiek van de uitbesteding van onderhoud in de civiele infrastructuur . Rob Schoenmaker, 2011, Delft University of Technology, the Netherlands 44. Safety Management and Risk Modelling in Aviation: the challenge of quantifying management influences. Pei-Hui Lin, 2011, Delft University of Technology, the Netherlands.

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45. Transportation modelling for large-scale evacuations Adam J. Pel, 201,1 Delft University of Technology, Delft 46. Clearing the road for ISA Implementation?: Applying Adaptive Policymaking for the Implementation of Intelligent Speed Adaptation Jan-Willem van der Pas, 2011, Delft University of Technology, the Netherlands 47. Designing multinational electricity balancing markets. Reinier van der Veen, 2012, Delft University of Technology, the Netherlands 48. Understanding socio-technical change. A system-network-agent approach. Catherine Chiong Meza, 2012, Delft University of Technology, the Netherlands 49. National design and multi-national integration of balancing markets. Alireza Abbasy, 2012, Delft University of Technology, the Netherlands 50. Regulation of gas infrastructure expansion. Jeroen de Joode, 2012, Delft University of Technology, the Netherlands 51. Governance Structures of Free/Open Source Software Development. Examining the role of modular product design as a governance mechanism in the FreeBSD Project. George Dafermos, 2012, Delft University of Technology, the Netherlands 52. Making Sense of Open Data – From Raw Data to Actionable Insight. Chris Davis, 2012, Delft University of Technology, the Netherlands 53. Intermodal Barge Transport: Network Design, Nodes and Competitiveness. Rob Konings, 2009, Delft University of Technology, Trail Research School, the Netherlands 54. Handling Disruptions in Supply Chains: An integrated Framework and an Agent-based Model. Behzad Behdani, 2013, Delft University of Technology, the Netherlands 55. Images of cooperation; a methodological exploration in energy networks. Andreas Ligtvoet, 2013, Delft University of Technology, the Netherlands 56. Robustness and Optimization of Complex Networks: Spectral analysis, Modeling and Algorithms, Dajie Liu, 2013, Delft University of Technology, The Netherlands 57. Wegen door Brussel: Staatssteun en publieke belangen in de vervoersector, Nienke Saanen, 2013, Delft University of Technology, The Netherlands 58. The Flexible Port, Poonam Taneja, 2013, Delft University of Technology, The Netherlands 59. Transit-Oriented Development in China; How can it be planned in complex urban systems?, Rui Mu, 2013, Delft University of Technology, The Netherlands 60. Cross Culture Work; Practices of collaboration in the Panama Canal Expansion Program, Karen Smits, 2013, University Amsterdam, The Netherlands 61. Structuring Socio-technical Complexity; Modelling Agent Systems Using Institutional Analysis, Amineh Ghorbani, 2013, Delft University of Technology, The Netherlands

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NFInfra PhD Thesis Series on Infrastructures

62. Towards Playful Organzations; How online gamers organize themselves (and what other organizations van learn from them), Harald Warmelink, 2013, Delft University of Technology, The Netherlands 63. Electricity without borders; The need for cross-border transmission, Carlo Brancucci Martinez-Anido, 2013……… 64. The Power of Electric Vehicles; Exploring the Value of Flexible Electricity Demand in a Multi-actor Context, Remco Verzijlbergh, 2013, Delft University of Technology, The Netherlands 65. The impact of the policy mix on service innovation. The formative and growth phases of the sectoral innovation system for Internet video services in the Netherlands, Martijn Poel, 2013, Delft University of Technology, The Netherlands. 66. Acceptance-by-Design; Elicitation of Social Requirements for Intelligent Infrastructures, Layla AlAbdulkarim, 2013, Delft University of Technology, The Netherlands. 67. ‘Publieksvriendelijk’ versnellen van innovatie in netwerksectoren. Een exploratie van wetstechnische mogelijkheden ter bevordering van innovatie in de telecomsector, met behoud van de bescherming van publieke belangen, Lesley Broos, 2014, University of Twente, The Netherlands. 68. Spectrum Trading in the United Kingdom: Considering Market-Based Liberalization from Two Perspectives, Rajen Akalu, 2014, Delft University of Technology, The Netherlands. 69. Platform Dilemmas: Collective Action and the Internet of Things, Fatemeh Nikayin, 2014, Delft University of Technology, The Netherlands. 70. Scripting Transitions: A framework to analyze structural changes in socio-technical systems, Anish Patil, 2014, Delft University of Technology, The Netherlands.

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