Transition versus Vested Interests

House providing itself with solar power

A transition is a ‘structural societal change resulting from mutually reinforcing developments in economy, culture, technology, institutions and nature’, according to the Dutch transition guru, Rotmans.

A transition towards a sustainable energy system is necessary and inevitable for reasons of cost, (energy) security and climate protection. Even the Dutch government seems to have grasped this necessity and has created a platform EnergieTransitie to guide the energy transition. 

Inflation
However, lately the meaning of a transition has been subject to inflation. A couple of weeks ago, the Platform EnergieTransitie proudly presented the first successes in Carbon Capture & Storage (CCS). This technology is seen by the Platform as the ‘deus ex machina’ towards reaching CO2-reduction targets. CCS, however, has nothing to do with an energy transition because it, instead of spurring societal change, would provide a means of continuing business as usual without critically assessing the energy system.

Recently, the renowned Boston Consulting Group (BCG) published the report ‘Groen licht voor groene stroom’ (Thumbs Up for Green Electricity). This report rightly concludes that the policy of the Dutch government falls short considering long term investor security in the renewable energy sector.

In order to make the energy system sustainable, BCG sees the biggest opportunities for the Netherlands in large scale (offshore) wind and biomass projects because these would be most cost efficient. However, in a real energy transition, decentralization is key.

Decentralization
Decentralized production of renewable energy is by definition more efficient than a centrally organized fossil based energy supply. This is due to the fact that it avoids losses through energy conversion and distribution. Renewable energy potential is distributed randomly across the globe and, similarly, energy use mostly takes place in a decentralized manner. Why bother centralizing production only to distribute it again afterwards?    

Furthermore, decentralized local energy production leads to a democratization of the energy system. Individual households will no longer be dependent upon large centralized energy suppliers, and could thus choose how to provide in their energy needs. Energy dependencies, whether on monopolistic multinationals or instable corrupt countries, would be  confined to history books.

In its report, BCG does mention the possibility of solar energy as a means for a decentralized energy supply that could already be competitive with consumer electricity prices by 2015. Surprisingly however, they conclude from this fact that solar could not contribute significantly to the Dutch energy mix.    

Winners and losers

If the Netherlands really wishes to make its energy system more sustainable, it is necessary to make clear choices. A transition inherently includes conflicts of interests. In the long term outlook of the report mentioned earlier, BCG states: ‘It is essential that the Dutch government actively involves the energy industry in the decision making process towards a common transition towards renewable energies. If there is no intrinsic ambition from the industry towards sustainability, all state initiated action will in the long run fail.’ (translated from Dutch)

Experience, however, shows that organizations that have vested interests in maintaining the status quo will not actively promote change and could even hinder a transition. Therefore, far more potential lies in decentralized, bottom-up initiatives. An example of which is the Windvogel (Wind bird) initiative: a local cooperation of citizens that purchase a wind turbine together and use the produced energy themselves. Also, in Germany, the country taking the lead in the global energy transition, bottom-up initiatives like the ‘Solar Bundesliga’ (a competition between municipalities to produce as much solar energy as possible) and ‘100% renewable energy regions’ (an initiative to make regions selfsufficient regarding energy use) have proven to be very successful.

Government should lead the way

The Dutch government has the difficult task of guiding the upcoming energy transition while ensuring that it comes about as smoothly as possible. The government made a first step in the right direction with the founding of the Platform EnergieTransitie. Followed by a step in the wrong direction, with appointing the general-director of Royal Dutch Shell as the chairman of the platform. Recently followed by a leap in the wrong direction through announcing plans for a new nuclear power plant.

The Dutch government should make sure not to act according to the stakes of the established companies, but in the interests of society as a whole.

(based on my column in Dutch on EnergySquare on 22/06/2010)