Innovation and institutional change: the transition to a sustainable ...

Evolution of decentral cogeneration in the Netherlands 141
industrial branches 15 (Buiter and Hesselmans, 1999: 133). This was also the
year that the first small-scale industrial gas turbine (3.2 MW) came into
operation for continuous use. VKW conducted sector studies for the paper
and textiles industries and organized around ten regional meetings on energy
saving and energy management, with average participation of forty
businesses (Buiter and Hesselmans, 1999: 133). Furthermore, a large amount
of research reports, feasibility studies, evaluations, and market research
studies regarding cogeneration for a wide range of applications are published
in the first half of the eighties 16 . The potential of cogeneration as an
alternative to nuclear and coal-fired power plants was also prominent in the
broad societal discussion in the early eighties (SMDE, 1983). In a reaction to
the outcomes of the discussion, the AER pointed at the potential of
cogeneration, but also at institutional constraints such as connection
conditions and financial regulations in the electricity sector, and at
disappointing growth figures relative to expectations (AER, 1984). See also
Table 5.3 for an overview of main policy documents and other developments
impacting the course of cogeneration in the period 1985-1997.
Uptake of cogeneration in process industries
In the first half of the eighties investments in decentral cogeneration slowly
started to pick up, mainly because investments were undertaken in a range of
process industries whereas in the period of 1968 until 1978 virtually all
investments in cogeneration took place in the chemical industry where
cogeneration capacity expanded from 300 to 830 MW during that period
(Blok, 1991: 132). In terms of actual investment several cogeneration units
were installed in the period 1980-1985 in refineries, the paper industry, the
food industry, and the chemical industry, with overall annual investments
ranging from 40 to 110 MW (Blok, 1991: 134). Relevant economic factors
for the uptake were improved electricity tariffs for cogeneration due to the
1979 negotiated agreement between self-producing industries and the
electricity sector, and subsidies on investment in energy saving that also
applied for cogeneration initiated in 1977. Investment grants were increased
from 10 to 20% in 1982 after advice in the second report of the committee
on industrial cogeneration and the General Energy Council (EZ, 1982; AER,
15 In previous years Potma had also pointed out the lack of knowledge regarding
cogeneration in government circles and the dominant orientation towards centralised largescale
power plants (Potma, 1979).
16 See for example the references in the advice on cogeneration by AER (1987), the work by
VKW and a range of studies undertaken by the Centre for Energy Saving. While the
studies originate from different segments of the electricity sector, government, and
industry, the prominent roles of VKW and the Centre for Energy Saving (initiated by
Potma, author of the forgotten scenario) stand out.