Innovation and institutional change: the transition to a sustainable ...
Innovation and institutional change: the transition to a sustainable ... Innovation and institutional change: the transition to a sustainable ...
Evolution of decentral cogeneration in the Netherlands 135 where to construct new and larger power plants based on relatively cheap gas 8 with higher efficiency that enabled stable electricity prices, energy companies were forced to think about improving efficiency and energy saving under volatile price conditions and slowing demand. Securing energy supply through resource diversification and reducing energy consumption through energy saving were the pillars under the changed energy policy in the first energy paper, which in fact was the first government attempt to develop a more comprehensive energy policy (TK, 1974). Initially, decentral cogeneration was not on the agendas of electricity companies and government but the focus was foremost on central cogeneration with district heating 9 . This changed when the energy council, founded in response to the first energy crisis, pointed out the potential of industrial cogeneration for energy saving and proposed a range of measures to realise this potential 10 (AER, 1978). The council had heterogeneous membership with representatives from industry, civil society, science and the electricity sector and was less biased to the existing configuration dominated by monopolistic behaviour of electricity companies. A specific committee on industrial cogeneration was formed by the Ministry of Economic Affairs to assess impediments for industrial cogeneration more in detail and to develop recommendations to overcome these obstacles (EZ, 1980). Mobilisation of actors for alternative routes The second oil crisis accelerated policy change in favour of decentral cogeneration due to skyrocketing energy prices. Energy saving was central to the second white paper on energy policy and significant contributions were planned by central cogeneration through district heating, and by decentral industrial cogeneration (TK, 1979). Policy change both involved 8 After discovery of the large Slochteren gas field in 1959 in the North of the Netherlands gas was offered at relatively advantageous prices. This policy changed to a prudent use of gas after the oil crisis. In the first energy paper of 1974 also a link of the gas price to the oil price was announced, and no new gas contracts for electricity generation were settled, except for highly efficient plants, such as combined cycles of gas and steam turbines (CCGT) (TK, 1974; Bläsing, 1992; Vlijm, 2002). For example, in 1976 the Donge CCGT power plant was brought into use with an efficiency of 44% (Bläsing, 1992: 331). Steam turbines reached efficiencies of 35 to 40% (VDEN, 1980; SEP, 1994; Hofman and Marquart, 2001). 9 A committee was set-up in 1975 to investigate the potential of district heating. Although the SEP was initially sceptical regarding the economics of district heating, in light of energy saving targets, government pressure, and growing insights regarding the potential, from 1977 on 16 large scale district heating projects were initiated. The focus on larger scale was expected to improve the cost picture. 10 Relevant to note is that two decades earlier the high efficiency of decentral cogeneration relative to central generation was already reported but largely ignored by the electricity sector and government (Buiter and Hesselmans, 1999; Verbong et al., 2001).
136 Chapter 5 and was triggered by changes in the networks of decision making for energy policy. One element of network change was the much stronger representation of self-producing industries in electricity affairs, such as through the industrial association 11 for power generation and cogeneration, Vereniging Krachtwerktuigen (VKW) and the cooperation between large industrial users of gas and electricity (SIGE) (Buiter and Hesselmans, 1999). A second element was the more pronounced role of civil society, and the environmental movement in particular, in shaping the electricity system. Representatives from the environmental movement took place in energy policy committees, such as the general energy council and the national steering group for energy research. Also important was the role of the ‘Rethink Energy Policy Group’ that was initiated in 1974 and already had informal meetings with government prior to the First White Paper on Energy 12 . This group opted for postponing the decision in favour of nuclear power plants and opted for more careful consideration of alternatives, among others by building competences for and knowledge about those alternatives. In combination with the more antagonistic approaches of the anti-nuclear energy movement that had gained strength within civil society in the course of the seventies this opened up discussion over alternative routes in the electricity system and culminated in a broad societal discussion on nuclear energy at the beginning of the eighties. An alternative scenario 13 in response to the proposed construction of three nuclear power plants by government and the electricity sector became part of the discussion. Instead of focussing on large scale, centralised power plants such as with nuclear and coal power, the focus was particularly on energy saving, cogeneration and renewable energy development within a much more decentralised energy system (Potma, 1979; Dammers, 2000). A third element was the role of industry, where increasingly attention was asked for the relative high electricity prices 11 A specific steering group for cogeneration was set up within VKW in 1980. Members of the board were representatives of Philips, CSM, Papierfabriek de Hoop, Bos BV, Smilde Holding BV, Unilever, Shell Refinery Pernis, and Heineken. Membership increased from 80 members in 1982 to 100 in 1984 (Buiter and Hesselmans, 1999: 132). 12 This ‘Bezinningsgroep Energiebeleid’ was initiated by Tuininga, who worked at TNO at that moment and been one of the translators of the Report of the Club of Rome, and was asked by his fellow party member Trip, at that moment Minister of Science Policy, to organise the science community for a rethinking of energy policy. Members of the rethink energy policy group (Tuininga, Daey Ouwens, Turkenburg, Eisma, Riedijk) had an informal meeting with Ministers Lubbers (Economic Affairs) and Trip in july 1974 prior to the publication of the first White Paper on Energy (Verbong et al 2001: 65; and personal communication with Prof. E-J. Tuininga, June 2005). 13 This alternative scenario was developed by ir. Th. Potma, who was member of the ‘Rethink Energy Policy Group’ and had founded the Center for Energy Saving in 1978. Previously he worked at the Ministry of Health and Environment (Verbong et al., 2001: 80).
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136 Chapter 5<br />
<strong>and</strong> was triggered by <strong>change</strong>s in <strong>the</strong> networks of decision making for energy<br />
policy. One element of network <strong>change</strong> was <strong>the</strong> much stronger<br />
representation of self-producing industries in electricity affairs, such as<br />
through <strong>the</strong> industrial association 11 for power generation <strong>and</strong> cogeneration,<br />
Vereniging Krachtwerktuigen (VKW) <strong>and</strong> <strong>the</strong> cooperation between large<br />
industrial users of gas <strong>and</strong> electricity (SIGE) (Buiter <strong>and</strong> Hesselmans, 1999).<br />
A second element was <strong>the</strong> more pronounced role of civil society, <strong>and</strong> <strong>the</strong><br />
environmental movement in particular, in shaping <strong>the</strong> electricity system.<br />
Representatives from <strong>the</strong> environmental movement <strong>to</strong>ok place in energy<br />
policy committees, such as <strong>the</strong> general energy council <strong>and</strong> <strong>the</strong> national<br />
steering group for energy research. Also important was <strong>the</strong> role of <strong>the</strong><br />
‘Rethink Energy Policy Group’ that was initiated in 1974 <strong>and</strong> already had<br />
informal meetings with government prior <strong>to</strong> <strong>the</strong> First White Paper on<br />
Energy 12 . This group opted for postponing <strong>the</strong> decision in favour of nuclear<br />
power plants <strong>and</strong> opted for more careful consideration of alternatives, among<br />
o<strong>the</strong>rs by building competences for <strong>and</strong> knowledge about those alternatives.<br />
In combination with <strong>the</strong> more antagonistic approaches of <strong>the</strong> anti-nuclear<br />
energy movement that had gained strength within civil society in <strong>the</strong> course<br />
of <strong>the</strong> seventies this opened up discussion over alternative routes in <strong>the</strong><br />
electricity system <strong>and</strong> culminated in a broad societal discussion on nuclear<br />
energy at <strong>the</strong> beginning of <strong>the</strong> eighties. An alternative scenario 13 in response<br />
<strong>to</strong> <strong>the</strong> proposed construction of three nuclear power plants by government<br />
<strong>and</strong> <strong>the</strong> electricity sec<strong>to</strong>r became part of <strong>the</strong> discussion. Instead of focussing<br />
on large scale, centralised power plants such as with nuclear <strong>and</strong> coal power,<br />
<strong>the</strong> focus was particularly on energy saving, cogeneration <strong>and</strong> renewable<br />
energy development within a much more decentralised energy system<br />
(Potma, 1979; Dammers, 2000). A third element was <strong>the</strong> role of industry,<br />
where increasingly attention was asked for <strong>the</strong> relative high electricity prices<br />
11 A specific steering group for cogeneration was set up within VKW in 1980. Members of<br />
<strong>the</strong> board were representatives of Philips, CSM, Papierfabriek de Hoop, Bos BV, Smilde<br />
Holding BV, Unilever, Shell Refinery Pernis, <strong>and</strong> Heineken. Membership increased from<br />
80 members in 1982 <strong>to</strong> 100 in 1984 (Buiter <strong>and</strong> Hesselmans, 1999: 132).<br />
12 This ‘Bezinningsgroep Energiebeleid’ was initiated by Tuininga, who worked at TNO at<br />
that moment <strong>and</strong> been one of <strong>the</strong> transla<strong>to</strong>rs of <strong>the</strong> Report of <strong>the</strong> Club of Rome, <strong>and</strong> was<br />
asked by his fellow party member Trip, at that moment Minister of Science Policy, <strong>to</strong><br />
organise <strong>the</strong> science community for a rethinking of energy policy. Members of <strong>the</strong> rethink<br />
energy policy group (Tuininga, Daey Ouwens, Turkenburg, Eisma, Riedijk) had an<br />
informal meeting with Ministers Lubbers (Economic Affairs) <strong>and</strong> Trip in july 1974 prior<br />
<strong>to</strong> <strong>the</strong> publication of <strong>the</strong> first White Paper on Energy (Verbong et al 2001: 65; <strong>and</strong> personal<br />
communication with Prof. E-J. Tuininga, June 2005).<br />
13 This alternative scenario was developed by ir. Th. Potma, who was member of <strong>the</strong><br />
‘Rethink Energy Policy Group’ <strong>and</strong> had founded <strong>the</strong> Center for Energy Saving in 1978.<br />
Previously he worked at <strong>the</strong> Ministry of Health <strong>and</strong> Environment (Verbong et al., 2001:<br />
80).