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

162 Chapter 6
signify a process of path creation and escaping lock-in. The evolution of
green electricity will be chronologically traced and the logic behind this
evolution will be unravelled. The evolution of green electricity is explained
as a multi-level process of changes in actors, networks, sectors, and
governance structures. The emergence of the concept is understood as the
outcome of changing routines and practices within a firm triggered by
changes in the institutional environment in which it operates. The spread of
green electricity is understood as a process of institutionalisation with new
practices diffusing throughout the energy sector, with legitimacy gained
through the formation of new networks and alignment of a variety of actors,
and with increasing co-ordination between actors as emerging governance
structures develop from the local to the national and international level.
While often ‘radicalness’ of an innovation is conceptualised as breaking with
existing market linkages and technological competences (Abernathy &
Clark, 1985), this chapter contends that the extent that an innovation diverts
from existing paths, and involves radical innovation and path creation, is
negotiated in the course of its development and dependent upon the way it
becomes institutionally embedded, i.e. linked to existing and new
institutions. The success of a new path, such as green electricity, in
transforming an existing, or opening up a new, sociotechnical system is
strongly related to the way institutionalisation of the emerging path unfolds.
6.2 The emergence of green electricity as a concept
In the early nineties a meeting took place between representatives of the
electricity sector and the European Union in which liberalisation of the
electricity sector was discussed 2 . The general view in the electricity sector
was that due to homogeneity of the product, differentiation was difficult to
imagine. One dissenting view was from Wiechers, chairman of PNEM 3 , a
regional distributor in the South of the Netherlands. Wiechers had
experience with liberalisation of the telecommunication sector in his
previous position as research director of KEMA, and expected that various
ways of differentiation could be established. One aspect he had in mind was
the creation of a more independent position in the market for the notion of
‘sustainability’. As he pondered the implications of competition and
differentiation within the electricity sector and possible applications based
2 This paragraph is based on personal communication with Ir. W.K. Wiechers, former
chairman of PNEM and Essent, in April 2005.
3 Provinciale Noord-Brabantse Energie Maatschappij (Energy company for the Province of
North Brabant). PNEM had a monopolistic position for distribution of electricity in the
province of North Brabant until the electricity act of 1998.