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

Evolution of decentral cogeneration in the Netherlands 147
1989 to 1999. In one decade the face of the Dutch electricity system
radically altered as also imports increased fourfold. The steep increase in
cogeneration can be understood as the interlocking of several change
processes that created strong momentum for cogeneration. Restructuring in
the distribution sector, its increasingly subordinate position relative to the
producers, and the market orientation it developed, led distributors to use
cogeneration as a means to compete with the production companies. The
search for a new role and identity also led the sector to see contribution to
the national environmental policy plan as a way to broaden its task and to
strengthen its client (and societal) orientation 23 . Cogeneration thus fulfilled a
triple role: strengthening its relation with clients, strengthening its position
relative to the central producers, and improving its environmental profile.
Preparedness for change in the distribution sector thus coincided with a
change in policy that stimulated target groups to actively commit to
environmental goals. The new rules laid down in the electricity act also
supported development of decentral cogeneration as purchase of the
produced electricity was obligatory against a fixed tariff scheme.
Cogeneration expanded to various sectors facilitated by changing
organisational forms
Production of electricity based on decentral cogeneration increased sharply
from 1990 on, carried by increases in a range of industries, horticulture and
service sectors such as health care and recreation. This is indicated by table
5.4 where also the importance of the emergence of cogeneration units under
control of distributors is indicated. The active role of distribution companies
in bringing cogeneration to the market led to a wave of projects in sectors
where the number of cogeneration units previously had been limited. The
heterogeneous character of industry and horticulture demanded a tailor-made
approach, and the distribution sector had to built up knowledge and
experience for which they worked together with Novem 24 and national
branch associations (EnergieNed, 1994). For example for horticulture and
health care plans of action were developed in collaboration with the project
office for cogeneration 25 and total installed small-scale capacity increased
23
This is illustrated by a policy note of the electricity distributor PGEM in 1989 in which
three core elements were developed: client orientation, care for the environment, and
decentral generation (Vlijm, 2002: 196). The new policy led to expansion of decentral
generation capacity of PGEM from approximately 70 MW in 1989 to 336 MW in 1994
(Vlijm, 2002: 190-191).
24
The implementation agency of the Ministry of Economic Affairs for various energy saving
and R&D programs.
25
This project office was jointly financed by the electricity sector (SEP and EnergieNed),
Gasunie, and the Ministry of Economic Affairs. In 1998 funding was ended and the project