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Socio-Technical Transitions and Infrastructure Networks: the Cases of Electricity and Heat Distribution in the UK

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Socio-Technical Transitions and Infrastructure Networks: the Cases of Electricity and Heat Distribution in the UK Socio-Technical Transitions and Infrastructure Networks: the cases of electricity and heat distribution in the UK Ronan Patrick Gerard Bolton A thesis submitted in accordance with the requirements for the degree of Doctor of Philosophy September, 2011 The University of Leeds Sustainability Research Institute, School of Earth and Environment ii The candidate confirms that the work submitted is his own, except where work which has formed part of jointly-authored publications has been included. The contribution of the candidate and the other authors to this work has been explicitly indicated below. The candidate confirms that appropriate credit has been given within the thesis where reference has been made to the work of others This copy has been supplied on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement © 2011 The University of Leeds and Ronan Patrick Gerard Bolton Publication Related to this thesis: Bolton, R. and Foxon, T. 2011. Governing Infrastructure Networks for a Low Carbon Economy: Co-Evolution of Technologies and Institutions in UK Electricity Distribution Networks. Competition and Regulation in Network Industries, 12, 2-26 In writing this paper I received direction and advice from the second author; however as the lead author its content largely draws from my own field work and literature review. Relevant sections are marked within the text. iii Acknowledgements Without assistance and support from a number of sources this thesis would not have been possible. A debt of gratitude is owed to the following people: To my primary supervisor Dr. Tim Foxon who offered guidance and support throughout the entire process. Thank you for your encouragement and patience, in particular for allowing me to explore my own ideas and interests whilst constantly keeping me on track and helping to give an overall coherence to the study. To my second supervisor Professor Andy Gouldson who allowed me to benefit from his knowledge and experience. This has made the thesis more robust and opened up new avenues of research which I hope to explore in the future. To Dr. Joseph Murphy who was part of my research support group. Thank you for your advice and timely interventions during the process which helped to shape the thesis. To my colleagues on the ‗Transition Pathways to a Low Carbon Economy‘ project and EPSRC/E.ON for their funding support. To my colleagues, both staff and fellow PhD students, within the SRI for your help and friendship The study would not have been possible but for the input of the various interviewees in energy companies and local authorities To my parents and sister, go raibh mile maith agaidh And finally to Line, for keeping me sane! iv Abstract There is a growing recognition that current energy systems are unsustainable and require fundamental restructuring. While this is a significant engineering challenge it is not a matter of replacing one set of technologies with another. Technologies are embedded in a wider set of political, social and economic institutions which means that the transition from one energy system to another also requires an understanding of the interactions between the technical and non-technical. This thesis contributes to knowledge in this area by paying specific attention to energy distribution networks; the pipes and wires which deliver our energy services. It is argued that existing approaches to the study of transitions in energy systems have largely black-boxed the network components, tending to concentrate on production and demand. However, infrastructure networks have unique technical and institutional characteristics which require a more systematic treatment. Therefore the aim of the thesis is to make more visible the interplay between actors, institutions and technologies in reproducing and transforming energy distribution networks. For this purpose a novel analytical framework is developed which draws from economics and science and technology studies and incorporates insights from the governance literature. The framework is applied to the cases of electricity and heat distribution in the UK. It is found that following the liberalisation of energy systems, the governance of distribution networks has been siloed from the mainstream energy regime which has focused on promoting competition in other segments of the value chain. Therefore efforts to decarbonise energy supply in the UK have tended to be market based with a short term focus, rather than integrated solutions which recognise the role that flexible distribution networks can play in this transition. A number of policy recommendations are made which inform debates surrounding the development of local heat infrastructures and the reconfiguration of electricity distribution systems. v Table of Contents 1 INTRODUCTION.................................................................................................................... 1 1.1 INNOVATION, INDUSTRY AND ENVIRONMENTAL SUSTAINABILITY .................................... 3 1.2 SOCIO-TECHNICAL TRANSITIONS AND INFRASTRUCTURE NETWORKS .............................. 6 1.3 GOVERNANCE, THE STATE AND ENERGY SYSTEMS ........................................................... 7 1.4 RESEARCH QUESTIONS ...................................................................................................... 8 1.5 OUTLINE OF THE THESIS .................................................................................................. 10 2 THEORETICAL PERSPECTIVES ON THE DYNAMICS OF INFRASTRUCTURE NETWORKS ............................................................................................................................................ 13 2.1 ECONOMIC AND INSTITUTIONAL APPROACHES ................................................................ 14 2.1.1 New Institutional Economics ............................................................................................... 15 2.1.2 Evolutionary Approaches: Incorporating Technical Change ............................................. 24 2.2 SOCIO-TECHNICAL APPROACHES .................................................................................... 35 2.2.1 Social Construction of Technology...................................................................................... 37 2.2.2 Systems Approach................................................................................................................ 39 2.2.3 The MLP and Transition Pathways ..................................................................................... 44 2.2.4 Splintering Urbanism .......................................................................................................... 48 2.3 SUMMARY OF THE LITERATURE ON INFRASTRUCTURE NETWORKS ................................. 52 2.3.1 Critique of the Literature .................................................................................................... 54 2.4 REVEALING THE ROLE OF THE STATE IN THE GOVERNANCE OF INFRASTRUCTURE NETWORKS 55 2.4.1 Representations of the State in the Literature ..................................................................... 55 2.4.2 Governance Perspectives .................................................................................................... 59 2.5 CHAPTER SUMMARY........................................................................................................ 66 3 ANALYSING THE INTERPLAY BETWEEN ACTORS, INSTITUTIONS AND TECHNOLOGIES IN INFRASTRUCTURE SECTORS .................................................................... 69 3.1 INTRODUCTION ................................................................................................................ 69 3.2 CHARACTERISING THE GOVERNANCE REGIME ................................................................ 70 3.3 INTERVENTIONS AND INTERACTIONS ............................................................................... 72 3.4 OUTCOMES ...................................................................................................................... 74 3.5 SUMMARY OF THE ANALYTICAL FRAMEWORK ................................................................ 82 3.6 RESEARCH DESIGN .......................................................................................................... 83 3.6.1 A Qualitative Case Study Approach .................................................................................... 84 3.6.2 Case Study Selection and the Unit of Analysis .................................................................... 86 3.6.3 Data Collection and Analysis .............................................................................................. 89 4 OVERVIEW OF UK ENERGY POLICY AND NETWORKS ......................................... 93 4.1 INTRODUCTION ................................................................................................................ 93 4.2 ENERGY IN THE UK ......................................................................................................... 93 4.3 THE ELECTRICITY SUPPLY INDUSTRY (ESI) .................................................................... 96 4.3.1 The Evolution of Electricity Markets in the UK .................................................................. 99 4.3.2 Challenges Facing the ESI and Distribution Networks ..................................................... 102 4.4 COMBINED HEAT AND POWER WITH DISTRICT HEATING (CHP-DH) ............................ 108 4.4.1 Historical Overview of CHP-DH in the
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