Transition pathways for a UK low carbon electricity future

Energy Policy 52 (2013) 10–24

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Transition pathways for a UK low carbon electricity future Timothy J. Foxon n Sustainability Research Institute, School of Earth and Environment, University of Leeds, Leeds LS2 9JT, UK

a r t i c l e i n f o

a b s t r a c t

Article history: Received 19 September 2011 Accepted 1 April 2012 Available online 4 June 2012

Achieving long-term targets for greenhouse gas emissions reductions, such as the UK’s legally-binding target of reducing its emissions by 80% by 2050, will require a transition in systems for meeting and shaping energy service demands, involving radical substitution to low-carbon supply technologies and improvements in end-use energy efficiency. This paper describes the development and high-level analysis of a set of transition pathways to a UK low carbon electricity system, explaining key features of the core pathways developed and the distinctiveness and value of the approach. The pathways use an ‘action space’ concept to explore the dynamic interactions between choices made by actors, which are influenced by the competing governance ‘framings’ or ‘logics’ that different actors pursue. The paper sets out three core transition pathways – Market Rules, Central Co-ordination and Thousand Flowers, in which market, government and civil society logics respectively dominate. It summarises the key technological and institutional changes in these pathways, and the roles of actors in bringing these about. This leads to an identification of the key risks to the realisation of each of the pathways, and of the challenges for individuals, businesses, social movements and policy-makers in taking action to bring them about and sustain them. & 2012 Elsevier Ltd. All rights reserved.

Keywords: Transition pathways Governance patterns Action space

1. Introduction In 2008, the UK Parliament passed the Climate Change Act, which set a legally-binding goal to reduce the UK’s greenhouse gas emissions by 80% below 1990 levels by 2050. It also established an institutional framework for setting intermediate carbon budgets and holding the UK Government to account for measures to achieve them. The Committee on Climate Change (CCC), consisting of experts in climate science, technology and economics, was set up to advise the Government and recommend the carbon budgets, starting with the first three budget periods 2008–12, 2013–17 and 2018–22. Based on technical and economic modelling and analysis, the Committee’s scenarios for achieving these budgets focussed on the UK moving to a ‘highly-electric’ future, in which electricity, generated from low-carbon sources, is increasingly used as the main energy carrier for heating and transport, as well as for other power and lighting services. Despite the fundamental transformation of the UK energy system that this implies, most UK scenario work (CCC, 2008; DECC, 2010a; Skea et al., 2011) has focussed on the rates of adoption of low-carbon technologies needed and the additional energy system costs involved, with relatively little discussion of the motivations of the different actors involved, the interactions

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between them and the choices and actions needed to ‘get from here to there’. This paper describes research developing scenarios or transition pathways to a UK low carbon electricity future by 2050 that focuses on the actions of the actors, both large and small, and the governance arrangements that frame the choices involved. This is part of a large research project, involving engineers, social scientists and policy analysts from nine UK universities, that is analysing the technical and economic feasibility and social and environmental potential and acceptability of these pathways, as reported in the companion papers in this special issue. The approach to developing transition pathways, described in detail elsewhere (Foxon et al., 2010), applies recent research using a multi-level perspective for analysing transitions in sociotechnical systems, such as energy systems (Geels, 2002, 2005, 2011; Grin et al., 2010), and related work on a coevolutionary framework for analysing low-carbon transitions (Foxon, 2011). Transition pathways arise through the dynamic interaction of technological and social factors at and between different levels, mediated by the actions of actors within an ‘action space’. Three key types of actor influence change: government actors; market actors, such as large energy firms; and civil society actors, such as community and environmental groups. We argue that these different actors have fundamentally different ‘logics’ or framings of the key energy challenges. Hence, the logic or framing that dominates a pathway will have a crucial influence on energy choices made and the shape of any future low-carbon energy

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system. We develop and analyse three core transition pathways, named Market Rules, Central Co-ordination and Thousand Flowers, in which the logic or framing of market actors, government actors, and civil society actors respectively dominate. The pathways thus aim to inform thinking by policy-makers, energy firms and civil society actors by showing how different framings of the issues could lead to radically different low-carbon energy futures. This suggests the need for a much deeper debate on what kind of energy future we, as a society, would like to see. The relative priorities and potential trade-offs between carbon reduction and other objectives, including maintaining energy security, contributing to economic prosperity and ensuring affordability of energy services, are then inherently political. The paper aims to contribute to this debate by examining how different framings and choices could lead to different outcomes, and highlighting the challenges that this poses for different stakeholders. Section 2 of the paper outlines the approach taken to developing transition pathways, in relation to the multi-level perspective and action space. Section 3 describes the methodology followed in applying this approach to UK electricity systems, and how the pathways inform and are informed by the other parts of the analysis in the research project. Section 4 sets the context for our transition pathways by analysing recent UK energy policy developments, identifying a move away from a purely market-oriented governance framework to one in which central government is beginning to play a more active role, though still with a limited role for civil society actors. Section 5 describes our core transition pathways for a UK low carbon electric future, highlighting the key technological and institutional changes in these pathways, and the roles of actors in bringing these about. Section 6 discusses the challenges for individuals, businesses, social movements and policy-makers in taking appropriate action to bring them about. Section 7 concludes by discussing the distinctive features of the transition pathways approach.

2. Approach to developing low-carbon transition pathways In framing the challenge of moving to a sustainable low carbon energy system, whilst achieving other objectives of maintaining security of energy supply and affordability of energy services, governments have begun to use the language of transitions. In the foreword to the UK Government’s July 2009 Low Carbon Transition Plan, Ed Miliband, the then Secretary of State for Energy and Climate Change (and now Leader of the opposition Labour Party), stated, ‘‘The transition to a low-carbon economy will be one of the defining issues of the 21st Century’’ (HM Government, 2009, foreword). Through such documents and associated policies, national governments seek to play a leadership role; nevertheless, as Miliband acknowledges, a low-carbon transition cannot be achieved without the active engagement of market and civil society actors, ‘‘y every business, every community will need to be involved’’ (HM Government, 2009, foreword). Such exhortations are often accompanied by an optimistic vision of a low carbon future – ‘‘Together we can create a more secure, more prosperous low carbon Britain and a world which is sustainable for future generations’’ (HM Government, 2009, foreword). In practice, a transition to low carbon systems of energy supply and energy service provision will require radical changes to technologies, institutions, business strategies and user practices; hence, it raises governance challenges in relation both to the engagement of different actors and to the incentives and barriers they face (Foxon et al., 2010). ‘Governance’ here refers to the structures and processes that influence decisions made by

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different actors within the system, including national and local policy-makers, large firms and new entrants, financial investors and end-users, and how these choices give rise to changes to the system (Smith, 2009). Technological and economic modelling currently form the dominant modes of analysis of future low carbon energy systems. This arguably relates to the predominant influence of economic thinking on policy-making in this area, such as the requirement of identifying ‘market failures’ in order to justify government action. This then tends to militate against considerations of wider social impacts and benefits. We argue that there is a need for analytical frameworks that can address the interactions of social and technological factors, in order to address these wider governance challenges. Public debates about climate change policy often focus on the desirability of particular technological options, such as wind farms or nuclear power stations. However, we would suggest that these debates reflect deeper arguments about alternative visions of future societies. The research described in this paper examines alternative pathways to different low-carbon electricity system futures for the UK under different governance arrangements, in order to inform these deeper arguments. The work aims to examine how governance processes actively engage with and shape a low-carbon transition by analysing the tensions and choices faced by key actors, and how the actors may respond to these choices. This work is being undertaken by an interdisciplinary consortium of UK researchers, involving engineers, social scientists and policy analysts, supported by the UK Engineering and Physical Sciences Research Council (EPSRC) and the integrated power and gas company E.On. It builds on the expanding literature on sociotechnical transitions using a multi-level perspective (Geels, 2002, 2005; Grin et al., 2010; Smith et al., 2010; Geels, 2011). This combines technical, social and historical analysis of and insights into past and current transitions, using an analytical framework based on interactions between three levels: technological niches, socio-technical regimes, and landscapes. The landscape represents the broader political, social and cultural values and institutions of society; the socio-technical regime reflects the prevailing set of routines or practices that actors and institutions use and that create and reinforce a particular technological system; and niches represent spaces that are at least partially insulated from ‘normal’ market selection in the regime that provide places for technological and social learning to occur. The motivation and theoretical basis that we apply for specifying transition pathways has been described in detail elsewhere (Foxon et al., 2010) and is depicted in Fig. 1. This draws on an analytical framework based on the multi-level perspective (MLP) and a related framework for analysing the co-evolution of ecosystems, technologies, institutions, business strategies and user practices for a transition to a low carbon economy (Foxon, 2011). This builds on, but goes beyond, existing approaches to analysing socio-technical transitions. As described in Foxon et al. (2010), these approaches have developed along three main lines: (1) using the MLP as a framework for the analysis of the historical dynamics of transitions; (2) analysing processes of governance for ‘transition management’; (3) elaboration of socio-technical scenarios for future transitions. Our approach develops the latter work on socio-technical scenarios using the multi-level perspective, which ‘‘describes a potential transition not only in terms of developing technologies but also by exploring potential links between various options and by analysing how these developments affect and are affected by the strategies (including policies) and behaviour of various stakeholders’’ (Elzen et al., 2002; Elzen and Hofman, 2007; Hofman et al., 2004; Hofman and Elzen, 2010). As may be seen from the book by Grin et al. (2010), which sets out the state of the art in sustainability transitions research, most of this research has explored the first two of these lines, with

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T.J. Foxon / Energy Policy 52 (2013) 10–24

Fig. 1. Factors influencing transition pathways from a high-carbon to a low-carbon regime. Source: Foxon et al., 2010.

relatively little attention paid to the development of sociotechnical scenarios. Furthermore, we argue that, by incorporating coevolutionary perspectives, our approach to developing transition pathways goes beyond the existing work on socio-technical scenarios by paying greater attention to economic aspects and the role of actors, in addition to the interaction of social structures and technological elements. The work may be seen as part of a wider effort to bring social structures and agency, including institutions and politics, into scenario and backcasting studies of sustainable energy futures (Wangel, 2011; Nilsson et al., 2011). The approach seeks to examine how pathways can be shaped by a range of actor groups, including policymakers, incumbent market firms and new entrants, consumers and civil society actors. It aims to provide a novel integration of quantitative and technical aspects, e.g. generation and infrastructure requirements, with qualitative aspects, e.g. roles and behaviours of actors and governance processes. Finally, it aims to identify and analyse potential branching points along these pathways (branching points arise where actors respond to cumulative or sudden pressures by making choices that could significantly affect the pathway’s trajectory and future steps along it). In order to explore the interactions between different actors within the coevolutionary development of the pathways, the project team has developed an ‘action space’ approach for analysing the governance interactions between three key groups of actors – government actors, market actors and civil society actors.1 The action space provides a visual representation of the relative influence of each of these three groups of actors, which could change over time in the course of a pathway. The starting point for this approach is that different types of actors typically follow different underlying ‘logics’ that frame their view of the world and of other actors, and seek to ‘enrol’ others into their logic. In reality, of course, there are messy and dynamic processes of interaction between many competing logics. Our action space abstracts from this complexity by mapping the changing relationships between three key types of actors according to this competition between their logics. Thus, in this characterisation, the government logic argues for

1

The action space approach was originally developed by Jacquie Burgess and Tom Hargreaves at the University of East Anglia.

a dominant role for the direct co-ordination of energy systems by national government actors to deliver energy policy goals. The market logic argues that energy policy objectives are best achieved by market actors freely interacting within a high-level policy framework. The civil society logic argues that energy systems should meet the needs of citizens, who should therefore take a leading role in the decisions relating to how the energy system operates. According to how they frame energy challenges, actors are taken to follow one of these logics, which also implies a simplified representation of the role of other types of actors. Via their interactions, actors seek to enrol other actors in their framing of the challenges. The dominant type of actor – the most effective ‘enroler’ – defines the dominant form of governance in that period’s ‘action space’, with corresponding influence on the pathway and its branching points. As illustrated in Fig. 2, each actor thus tries to pull the ‘centre of gravity’ of the action space towards their logic. This approach thus aims to provide a framework for exploring not only what energy technologies and institutions could change and how that change could occur in terms of structures, but also who are the actors who could make the changes happen (cf. Wangel, 2011). As described in the next section, to simplify the analysis, we assume that a particular logic continues to dominate over time in our core transition pathways. However, in practice, the prevailing logic may well change over time, corresponding to broader cultural changes at the ‘landscape’ level in the multi-level perspective. In the UK in recent decades, with market liberalisation in the energy sector, the centre of gravity has been towards the market logic, following earlier periods, with nationalised energy industries, when the government logic prevailed. The challenges of mitigating climate change and ensuring energy security may now be pulling the governance of UK energy systems back towards a government logic, with the civil society logic currently only being applied in a few niches.

3. Methodology for developing and analysing transition pathways for UK electricity system We have defined three core transition pathways to a UK low carbon electricity system, in which one of each of the three competing logics dominates. Thus, we have a market-led pathway, named

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Market ‘logic’

?

Government ‘logic’

Civil Society ‘logic’

Fig. 2. Patterns of governance: the action space for competing ‘logics’ in a transition. Source: J. Burgess and T. Hargreaves.

Market Rules, a government-led pathway, Central Co-ordination, and a civil society-led pathway, Thousand Flowers. Outline narratives or storylines were developed for each of these pathways, based on a critical review of UK and international energy scenarios and approaches to scenario building (Hughes and Strachan, 2010), workshops with stakeholders from policy, business and NGOs, and a set of interviews with energy system ‘gatekeepers’ (Hargreaves and Burgess, 2009). The development of these pathway narratives followed a three-step process (Foxon et al., 2010): (1) Characterise the existing energy regime, its internal tensions and landscape pressures on it; (2) Identify dynamic processes at the niche level; (3) Specify interactions giving rise to, or strongly influencing, transition pathways. An initial quantification of these narratives was then undertaken to produce a version 1.1 of the pathways. This involved specifying the changes that would occur to demands for services using electricity and the mix of power generation technologies needed to meet them, according to the logic and choices set out in each pathway narrative. This process was undertaken in an iterative way between the author and colleagues with expert understanding of energy service demands and technical feasibility of different generation technologies based on wider theoretical and applied research experience.2 At this stage, we assumed that, in each pathway, the actors aim at reducing UK carbon emissions by 80% by 2050, from 1990 levels, in line with the UK government’s greenhouse gas target, whilst also aiming to achieve energy security and affordability objectives; we did not, however, assume that they succeed in reaching the low-carbon target. The Version 1.1 pathways were then explored and interrogated in relation to: (a) their technical feasibility, e.g. electricity grid enhancements needed; (b) their social acceptability, e.g. by examining data from smart metering trials (Hargreaves et al., 2010); and (c) by undertaking a ‘whole systems’ sustainability appraisal of the pathways, including their life-cycle carbon emissions (Hammond et al., this issue). Further stakeholder workshops, including with energy company actors, policy-makers and NGO representatives, reflected on the pathways and the analysis undertaken. This analysis and these interactions highlighted several ambiguities and concerns with version 1.1 of the pathways, whilst reinforcing the value of the action space approach to their 2 This process was undertaken by the project’s Technical Elaboration Working Group, which consisted of Malcolm Barnacle, Stuart Galloway, Sikai Huang and Beth Robertson (University of Strathclyde), John Barton (University of Loughborough), Matthew Leach, Jacopo Torriti and Damie Ogunkunle (University of Surrey), and Tim Foxon (University of Leeds).

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development. Thus, a second iteration to produce and analyse version 2.1 of the pathways was undertaken by the project’s Technical Elaboration Working Group, as follows. The pathway narratives were used to inform the changes expected in how people use energy along each of the pathways, accordingly to the logic of that pathway, and so to provide a broad quantification of the evolution of electricity demand and supply to 2050 to meet domestic, transport, commercial and industrial energy service demands. A bottom-up, sectoral approach was taken, particularly in relation to domestic appliance, heating and transport demands, in order to project the energy service demands and technology mixes for heating, power and lighting, and consequent annual average electricity demand for each pathway (Barton et al., this issue). The evolution of the electricity generation mix needed to meet this demand for each pathway, according to the logic of that pathway, was then projected (Barnacle et al., this issue). This again drew on expert understanding and initial results of modelling how hourly energy service demands could be met, including the role of demand-side participation and the need for back-up generation to meet peak capacity, using the FESA energy system model (see Barton et al., this issue; Barnacle et al., this issue). The resulting generation and infrastructure requirements were then analysed using electricity transmission network and local residential network models (see Barnacle et al., this issue). Further related research has explored social aspects of the pathways in relation to the role of smart energy monitors giving householders real-time feedback on their energy use (see Hargreaves et al., this issue); applications and values of various smart network control and demand response technologies to enhance the operation management and efficiency of distribution network assets (see Pudjianto et al., this issue); lessons from the role of actors in previous energy transitions (see Arapostathis et al., this issue); and analysis of potential future branching points along the transition pathways (see Foxon et al., this issue). An updated a ‘whole systems’ sustainability appraisal of the pathways, including their life-cycle carbon emissions, will also be undertaken for version 2.1 of the pathways, using the methodology applied to version 1.1 of the pathways (see Hammond et al., this issue). The second iteration of the pathways also enabled the research to take into account further developments in UK energy policy and related published analyses that occurred after the formulation of version 1.1. These developments include the publication of a set of 2050 scenarios by the UK Department of Energy and Climate Change (DECC, 2010a), the recommendations for the fourth carbon budget period 2023–2027 by the Committee on Climate Change (CCC, 2010), and the government’s consultation and subsequent White Paper on electricity market reform (DECC, 2010b, 2011a). The DECC 2050 pathways are based on a spreadsheet model that usefully explores the technical potential for different demand and supply mixes for meeting the 80% carbon reduction targets by 2050, but is somewhat inflexible and gives relatively little insight into how and by whom these changes would be achieved. We argue that our pathways approach based on the multi-level perspective and the action space should provide greater insight into the challenges of achieving the 80% target because this approach recognises more fully the governance, behavioural and technical challenges involved in ‘getting there from here.’ The specification and analysis of the pathways thus draws on a mixed methods approach, incorporating stakeholder input, expert judgment and modelling results in an iterative way. Whilst this means that the resulting pathways will, to some extent, reflect the choices and preconceptions of the analysts, we argue that the process is relatively robust, as it incorporates a wide range of views on social acceptability and technical feasibility of the

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pathways. A more formal, criteria-based stakeholder evaluation of the pathways could have been undertaken (cf. Kowalski et al., 2009), but this would have been time- and resource intensive, and the project team felt that more informal workshop-based stakeholder assessment of the pathways was likely to be more useful to both the research team and the participants. In the end, we argue that the resulting pathways proved useful both in providing a framework for the more detailed technical and social analysis reported in the other papers in the special issue, and in stimulating actors’ thinking by incorporating at least some political and institutional aspects into the pathway storylines and analysis. In the latter point, we thus agree with the importance attached to this by Nilsson et al. (2011), who commented that ‘‘the plethora of low-carbon scenarios, road maps and pathways developed in recent years by academia, businesses, governmental agencies and NGOs do not have a remote chance of becoming reality without conducive political and institutional conditions.’’

4. Current governance challenges for UK energy systems The starting point for developing our transition pathway narratives is to describe the current system processes in relation to the framing of alternative governance arrangements used to define the pathways. So, we begin by setting out current governance challenges for UK energy systems using the multi-level and action space concepts. This enables the identification of current patterns of activity that may continue or be amplified into the future, and also key challenges and stresses that may give rise to new patterns of activity by actors within the system. In 2011, the dominant UK regime for meeting lighting, heating and power services is a centralised system, dominated by large players, with centralised technologies, large-scale transmission and distribution networks for electricity and natural gas, and supporting institutional frameworks. The electricity supply industry is dominated by a small number of large firms, many of which form part of companies with widespread international interests. These firms also control the majority of electricity generating capacity, in the form of large centralised coal- and gas-fired power stations, and large nuclear power stations, many of which are coming towards the end of their working life. The industry is subject to a regulatory structure to ensure competition and fair access, subject to guidelines set down by the government. We argue that, following the privatisation and liberalisation of energy firms and markets in the 1990s, described below, the dominant logic within the energy ‘action space’ has been the market logic, i.e. that energy policy objectives are best achieved by market actors freely interacting within a high-level policy framework. The current dominant UK energy regime and its associated market logic are now coming under increasing pressure, both from cultural and institutional changes in the wider ‘landscape’, and from alternative technologies and processes for delivering energy services, beginning to be developed and applied within ‘niches’. At the landscape level, dominant drivers of change are governmental commitments to national and international targets for moving to a low carbon energy system and concerns over security of supply, with concerns about affordability and fuel poverty beginning to loom larger against a backdrop of economic slowdown and austerity measures. As noted above, the UK domestic targets under the Climate Change Act, and its commitments under the European Energy and Climate Policy Package, which agreed the ‘20–20–20’ targets for 2020 of a 20% reduction in European CO2 emissions, a 20% increase in energy efficiency and 20% of final energy (electricity, heat and transport) to come from renewable sources, already imply the need to make significant improvements in energy efficiency and expansion of low-carbon

electricity generation. The UK government is now (in 2011) instituting a process of electricity market reform, as described below, which will change the balance of responsibilities between government, market actors and civil society actors. The current governance pattern of UK energy systems is thus evolving and the dominant market logic coming under pressure (Helm, 2004; Mitchell, 2008; Pearson and Watson, 2012). Under state ownership, the government and the Central Electricity Generating Board ensured that UK electricity generating capacity expanded rapidly in the 1950s and 1960s to meet increasing demands for electric lighting and electricity-using devices and to ensure high levels of supply security. By the late 1980s, neoliberal economic thinkers and politicians began to argue that the state-owned electricity system was economically inefficient, leading to overgenerous capacity margins and higher costs to consumers than was necessary. In the 1990s, the state-owned electricity generating and supply companies were broken up and sold to the private sector, and markets were created to promote competition for electricity generation and for supply of electricity to consumers. The physical transmission and distribution networks were also sold to private companies, to be operated as regulated monopolies. The regulator Ofgem was established with its principal statutory objective being ‘‘to protect the interests of consumers, where appropriate by promoting effective competition.’’ The privatisation and liberalisation of the industry in the 1990s, together with the expansion of UK natural gas production from the North Sea, and the desire of the regulator to develop competition facilitated changes to investment patterns, resulting in the building by energy firms of a large number of gas-fired power stations, the so-called ‘dash for gas’. These offered quicker returns to investment than either coal-fired or nuclear power stations. Despite the focus on competition in electricity supply, a series of mergers and acquisitions led to the current situation in 2011, where over 99% of domestic electricity consumers are supplied by six large, vertically integrated energy firms, most of which are part of larger international companies. The proponents of energy market liberalisation argued that the interests of consumers would be more effectively protected by competition between generators and between suppliers than by direct government involvement in the management of energy systems. This led, for example, to the abolition of the UK Department of Energy in 1992. However, subsequent regime and landscape changes have been associated with an increasing role for central government in recent years and so a move more towards a government logic in the action space, though with government still seeing a central role for market actors and processes. These changes have led to a more prominent role for government in establishing frameworks to ensure ‘‘secure, affordable and low-carbon’’ energy supply. Concerns over security of supply centre on replacement of older electricity generation capacity, coming offstream over the next decade, to ensure ‘‘keeping the lights on’’ and worries about over-dependence on imported sources of gas for both power generation and heating. The latter follows from the more rapid than expected decline of UK natural gas production from the North Sea, and concerns about the stability of certain countries from which imports of gas will increase. Most of the existing UK nuclear capacity (which currently supplies around 18% of UK electricity) will reach the end of its life within the next 10 years. In addition, a large proportion of existing UK coal-fired power stations are being forced to close by 2016 under the European Large Combustion Plant Directive, aiming to reduce local and regional air pollution. Increases in the international wholesale price of natural gas, which has been strongly linked to the price of oil, have resulted in significant increases in domestic electricity and gas prices. Despite the potential for the oil–gas price link to

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weaken as new sources of gas supply, such as shale gas, become available, the UK government’s central forecast is for the wholesale gas price to continue rising to 2015 and to remain at historically high levels thereafter (DECC, 2011c). This has led to concerns over the affordability of electricity and gas, both among households in fuel poverty and in more middle-income households, who are seen as having greater potential political influence. Finally, as noted above, the landscape change of growing public awareness of climate change and acceptance of the need for action is being turned into a pressure on the energy regime through the UK government’s imposition of a long-term carbon emission reduction target and acceptance of intermediate carbon budgets to 2022 and now 2027. The UK government’s 2009 Low Carbon Transition Plan (HM Government, 2009) set out measures for achieving the target of a 34% reduction on carbon emissions by 2020, from 1990 levels, including increasing the level of ambition for renewable electricity generation, via the Renewables Obligation for large-scale generation, in place since 2002 (Foxon and Pearson, 2007) and feed-in tariffs for small-scale renewable generation from 2010. Dynamic processes at the niche level, supported by these and other policy measures, are leading to the formation of technologyspecific innovation systems around a number of different technological alternatives. For large-scale renewable generation technologies, the most successful so far have been around the deployment of onshore and offshore wind, where new entrant companies have entered the market, sometimes working in partnership with existing energy firms. For small-scale renewable technologies, the generous size of the tariffs for solar photovoltaics led to a rapid increase in deployment of PV in homes and small-scale solar farm (up to 5 MW), which caused the government to reduce the level of the tariffs for PV before the end of a public consultation on tariff changes. This resulted in a successful legal challenge by renewable developers and environmental NGOs, to which the UK government is appealing. The innovation system for new nuclear build is dominated by existing large energy firms, working in collaboration with technology suppliers, who have successfully lobbied the UK government to reverse its previous opposition to new nuclear build, with the first announcement of a formal application to build a new nuclear power station expected in 2012. The innovation system around carbon capture and storage (CCS) technologies for coal and gasfired generation has been less successful, with the UK government failing to agree terms in late 2011 with the operator for the last remaining large-scale coal CCS demonstration plant that was seeking support under its £1 billion demonstration project scheme. However, the UK government has stated that it remains fully committed to CCS and will seek to support the development of other CCS projects. Arguments in the energy action space have thus focused on the necessary institutional frameworks and supporting measures to promote a technological mix that addresses the so-called ‘trilemma’ of ensuring secure, affordable and low-carbon energy supply (see also Boston, this issue). Critics of measures to promote low-carbon electricity generation have argued that the slow pace of reform and frequent changes to renewable support mechanisms are slowing down the rate of deployment of new generation needed to ensure security of supply (Sharman, 2011). Furthermore, other critics argue that the increases in electricity and gas prices for consumers, resulting from investment in lowcarbon generation and increases in international gas prices, could have a severe impact on the affordability of electricity and gas for consumers (Platchkov et al., 2011). This could lead to households in fuel poverty struggling to maintain adequate heat and power for their homes, and could weaken political acceptability of the levels of investment in low-carbon generation necessary to meet

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the carbon budgets. On the other hand, environmental groups continue to argue that the rate of reduction of greenhouse gas emissions is too slow to meet the UK’s contribution to mitigating climate change, and that more rapid action to improve energy efficiency and expand low-carbon energy supply are needed, through action by government and/or civil society (Cary, 2010). In addition, there are vociferous debates about the desirability of particular low-carbon options, including wind power, nuclear power and carbon capture and storage, whilst the long-term pathways to a low-carbon energy system are seldom debated, let alone agreed on. Following the change of UK Government in May 2010, and against the backdrop of the deepening financial crisis, the broad thrust of these policies was maintained, including the commitments to the existing carbon budgets to 2022 and renewable energy targets for 2020. However, the new Coalition government argued that the existing sets of policies were unlikely to deliver these targets and began a process aimed at strengthening the policies in key areas. Firstly, a consultation was undertaken on Electricity Market Reform, leading to the production of an electricity White Paper in July 2011 (DECC, 2010b, 2011a; Newbery, 2011). This is designed to promote high levels of investment in low-carbon generation by a range of measures including a carbon ‘floor’ price; a ‘contract for difference’ feed-in tariff for large-scale renewable and nuclear generation; an emissions performance standard set at 450 g CO2/kWh which would prevent new coal-fired power stations being built without carbon capture and storage; and a capacity mechanism to ensure sufficient back-up generation capacity is built to meet peak demands (DECC, 2011a). This process will thus give the government a much greater role in the specification of new low carbon generation, with concerns expressed by energy firms that this represents a significant move away from a market-based approach to deciding the appropriate generation mix (Newbery, 2011; Pearson and Watson, 2012). At the same time, a Renewables Roadmap was published, which aimed to tackle the barriers to renewable deployment to enable the growth in renewable energy to 2020 and beyond (DECC, 2011b). Following parliament scrutiny, the UK Government’s Energy Act became law in October 2011. This included proposals for a ‘Green Deal’ financing mechanism that would enable householders to finance energy efficiency improvements to their homes at no upfront cost, with the first Green Deals are expected to appear in Autumn 2012 (DECC, 2010c). In July 2010, the UK Government published a 2050 Pathways Analysis (DECC, 2010a), which set out and analysed a number of alternative pathways for the development of UK energy systems for meeting the 80% carbon emission reduction target by 2050, together with a spreadsheet calculator which enabled the user to follow the assumptions made and develop alternative pathways. In December 2010, the Committee on Climate Change published its recommendations for the fourth carbon budget period 2023–2027 (CCC, 2010). Following a period of deliberation, the UK Government accepted the Committee’s central recommendation corresponding to a 50% reduction in greenhouse gas emissions by 2025, relative to 1990 levels (32% below 2009 levels). This level of the fourth carbon budget was set into law, following approval by Parliament at the end of June 2011. In December 2011, the UK Government published a new Carbon Plan, summarising the current set of low carbon policy measures and setting out the Government’s plans for achieving the emissions reductions committed to in the first four carbon budgets, which aim to set the UK on a pathway to meeting its target under the Climate Change Act of reducing its carbon emissions by 80% by 2050 (HM Government, 2011).

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Market-led pathway Market Rules

Past regimes

Future regimes Action Space 1

Government-led pathway: Central co-ordination

Civil society-led pathway: Thousand Flowers

Fig. 3. Core transition pathways to a UK low carbon electricity system.

Table 1 Key characteristics of ‘Market Rules’ pathway. Pathway aspect

Characteristics

Key governance aspects Key technologies

Dominance of market logic, in which energy policy objectives are best achieved by market actors freely interacting within a high-level policy framework. Coal and gas with carbon capture and storage (CCS); nuclear power; offshore wind; onshore wind; imports; tidal barrage; wave and tidal power. Successful demonstration of CCS leads to high levels of deployment from 2020 onwards; high carbon price makes CCS, nuclear and largescale renewables economical to build, and enables roll-out of retrofit of CCS to remaining coal and gas power stations; increasing electricity demand from heating and transport somewhat offset by technical efficiency improvements. Incumbent regime actors (large energy companies) dominate; few new entrants. Landscape pressures (climate change and energy security) on regime actors leads to focus on carbon reduction and retrenchment around largescale technologies; small-scale renewable technologies fail to emerge from niches. Learning to achieve commercial deployment of CCS; large energy companies see ‘highly-electric’ future as a strategic business opportunity, with increasing demand for electric heating and electric vehicles in a carbon-constrained world. 80% of generation still connected at high-voltage transmission level by 2050, with coal and gas CCS and new nuclear following siting of existing plants, and offshore wind concentrated around Scotland, implying need for high levels of transmission reinforcement; ‘smart grid’ technologies are needed to meet increasing amounts of distributed generation.

Key concepts

Key actors Key multi-level patterns Key learning processes Key infrastructure aspects

The transition pathways developed here focus on the development of a UK low-carbon electricity regime from 2011 to 2050. The core pathways explore how the UK electricity system might develop under alternative governance patterns, focussing on how choices and actions by key actors within the system lead to changes in technologies, institutions, business strategies and user practices towards a low-carbon electricity regime, in the light of the challenges and current commitments identified above.

5. Core transition pathways for UK electricity system We have developed three core transition pathways to a UK low carbon electricity system, in each of which one of the three competing logics dominates (Fig. 3). We now briefly summarise how this logic plays out for each pathway,3 key institutional changes and roles of actors, and key risks to the realisation of each pathway. Tables 1–3 set out key characteristics for each pathway, based on the second iteration version 2.1 of the pathways. The quantification of levels of electricity demand and technology mixes of supply for these pathways is discussed briefly here, and in more depth in the papers by Barton et al. (this issue) and Barnacle et al. (this issue). 3 The full narrative for each pathway is available at www.lowcarbonpathways. org.uk.

5.1. Pathway 1: market Rules The market-led pathway, Market Rules, envisions the continued dominance of the market-led logic for the governance of UK energy systems (see Table 1). Following the liberalisation of energy markets and the privatisation of previously state-owned energy companies in the 1990s, UK energy policy has been dominated by a paradigm of market competition in both power generation and supply of electricity and gas to consumers, with regulated monopolies in the transmission and distribution networks (Helm, 2004; Mitchell, 2008; Pearson and Watson, 2012). Under this logic, the large energy firms are the dominant actors and they argue that the role of government is to ‘‘set the framework, and then get out of the way’’. In this pathway, the large energy firms focus on investment in the large-scale power generation technologies of nuclear power, offshore wind, and coal and gas-fired generation with carbon capture and storage. These are technologies with which the firms are generally familiar, have the skills for and/or see the largest return on investment from, in the context of a regulatory framework that leads to a high carbon price. In this pathway, the market remains the principal coordination mechanism. Increasing international acceptance of the need for climate change mitigation leads to governments setting stringent caps resulting in a high carbon price under the European Emissions Trading Scheme, which is gradually integrated with other international training schemes. Under industry lobbying, the UK government continues to provide support for large-scale

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Table 2 Key characteristics of ‘Central Co-ordination’ pathway. Pathway aspect

Characteristics

Key governance aspects Key technologies Key concepts Key actors

Dominance of government logic, which provides a dominant role for the direct co-ordination of energy systems by national government actors to deliver energy policy goals. Coal and gas CCS; nuclear power; offshore wind; onshore wind; tidal barrage; wave and tidal power. Role of Strategic Energy Agency and use of central contracts to reduce the risks of low-carbon investment. Central government, through creation and direction of Strategic Energy Agency; large energy companies in delivery of large-scale low-carbon investment. Landscape pressures, particularly energy security concerns as well as climate change, lead to greater role for central government, working closely with large energy companies; niche-level activity focused on large-scale technologies, particularly offshore wind and CCS, with less focus on small-scale technologies. Learning to achieve commercial deployment of CCS; co-operation but also tensions between government and large energy companies; increasing demand for electric heating and electric vehicles in a carbon-constrained world. 80% of generation still connected at high-voltage transmission level by 2050, with coal and gas CCS and new nuclear following siting of existing plants, and offshore wind concentrated around Scotland and in the North Sea, implying need for high levels of transmission reinforcement; ‘smart grid’ technologies are needed to meet increasing amounts of distributed generation.

Key multi-level patterns Key learning processes Key infrastructure aspects

Table 3 Key characteristics of ‘Thousand Flowers’ pathway. Pathway aspect

Characteristics

Key governance aspects Key technologies Key concepts

Dominance of civil society logic, in which citizens take a leading role in the decisions relating to how their local and national energy systems operate. Onshore wind; offshore wind; renewable CHP; solar PV; imports; tidal barrage; wave and tidal power. Move to ESCO business model; technological and behavioural changes lead to significant end-user demand reductions; positive feedbacks lead to ‘virtuous cycles’ in deployment of small-scale distributed generation technologies; greater community ownership of generation, including onshore wind and biomass CHP. ESCOs (both new entrants and diversified existing energy companies); local communities; NGOs. Landscape pressures (climate change and energy security) on regime actors and government support for small-scale and community-level initiatives leads to focus on demand reduction and small-scale technologies; small-scale renewable technologies emerge from niches. Learning to achieve commercial deployment of range of distributed generation technologies, with the emergence of a small number of ‘dominant designs’; large energy companies diversify into ESCO business model; focus on community-led renewable district heating schemes reduces the expected demand for electric heating, but rise in demand from electric vehicles. 50% distributed generation requires development of ‘smart grid’ technologies to handle two-way power flows; 50% still connected at highvoltage transmission level by 2050, dominated by high efficiency gas generation and offshore wind concentrated around Scotland and in the North Sea, implying need for significant levels of transmission reinforcement.

Key actors Key multi-level patterns Key learning processes Key infrastructure aspects

renewable generation and carbon capture and storage demonstration and early-stage commercialisation, to complement the incentive provided by the high carbon price. Climate change and continued energy security concerns lead to large energy companies investing heavily in large-scale centralised generation technologies – coal and gas with carbon capture and storage (CCS), nuclear power and offshore wind, leading to a rapid decarbonisation of electricity generation during the 2020s. However, despite being a large deployer of both offshore wind and CCS, the UK does not managed to establish a dominant expertise or manufacturing presence in these technologies, except for some specialist offshore installation firms. In the 2030s and 2040s, increases in use of electricity for heating (through air- and ground-source heat pumps), transport (through hybrid and pure electric vehicles) and industrial processes lead to a 50% overall increase in electricity demand by 2050 from 2010 levels. This additional demand is primarily met through significant increases in supply from coal and gas-fired generation with carbon capture and storage, offshore wind and nuclear power, mainly owned by large integrated energy companies, leading to electricity supply (including imports) in 2050 of 560 TWh, as shown in Fig. 4.

‘highly-electric’ future as a strategic business opportunity, with increasing demand for electric heating and electric vehicles in a carbon-constrained world. Consumers remain in essentially ‘passive’ roles, with opposition to high levels of new build of large-scale generation increasingly tempered by, initially, concerns about security of supply (‘keeping the lights on’) and then gradual acceptance of climate change, while nevertheless being unwilling to accept significant lifestyle changes, beyond buying more efficient appliances. Government plays a facilitation role, in particular by further centralisation of the planning system, in order to facilitate new build of low carbon generation, transmission and storage networks and the grid reinforcement necessary to allow low carbon generation on to the system.

5.1.2. Key risks Key risks to the realisation of this pathway include:

 carbon capture and storage turns out to be technologically or economically unfeasible;

 costs and/or higher levels of public opposition constrain levels of new nuclear build;

 significant power flows from North to South of UK increasingly 5.1.1. Key institutional changes and roles of actors Because governments see large energy companies as the only type of company that can finance and manage the necessary scale of investment, they allow investment costs to be passed through to consumers. Large energy companies increasingly see a



seen as inequitable by consumers in the North of England and Scotland, leading to public opposition; and supply-side focus means that little effort is made to incentivise behavioural changes, beyond purchase of more efficient appliances and switching from gas to electric heating.

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600

Electricity Generation by Technology

500

TWhr

400

300

200

100

0 2008 2010 2015 2020 2025 2030 2035 2040 2045 2050 Year Fig. 4. Electricity generation mix in ‘Market Rules’ pathway. Source: See footnote 3.

5.2. Pathway 2: central co-ordination The government-led pathway, Central Co-ordination, envisions the dominance of the government-led logic (see Table 2). In this pathway, the UK government increasingly comes to the conclusion that meeting the three energy policy goals of low-carbon, security of supply, and affordability of energy services requires greater direct government involvement in the governance of UK energy systems. By the late 2010s, the government sets up a Strategic Energy Agency (SEA) with the remit to manage the energy system to deliver its energy policy objectives. On behalf of the government, the SEA begins issuing tenders for tranches of particular types of low-carbon generation. The government also develops ‘technology push’ programmes, as public/private partnerships led by the Energy Technologies Institute and the Technology Strategy Board. These focus on areas where the UK could be a global leader, with a view to future technology transfer, as well as benefits to UK industry. Key programme areas are marine renewables (wave and tidal power); carbon capture and storage (CCS); and electric vehicles. In this pathway, this top-down management of the system again leads to a focus on the largescale generation technologies of nuclear power, offshore wind and coal or gas with carbon capture and storage. These technologies are seen by government as less disruptive to energy choices of consumers, are promoted by the energy firms, and are seen as offering opportunities for creating jobs and potential for exports benefiting the UK economy. Through the SEA, the government also provides strong incentives for household energy efficiency measures, initially prioritising those which are non-intrusive upon lifestyles and behaviour change. In the 2030s and 2040s, increases in use of electricity for heating, transport and industrial processes are partially offset by further energy efficiency improvements, resulting in a 20% overall increase in electricity demand by 2050 from 2010 levels. This additional demand is primarily met through increases in supply from nuclear power, coal and gas-fired generation with carbon capture and storage and offshore wind, leading to electricity supply (including imports) in 2050 of 448 TWh, as shown in Fig. 5. These power stations are mainly owned by large integrated energy companies, but operate under supply contracts issued by the Strategic Energy Agency on behalf of the government.

5.2.1. Key institutional changes and roles of actors In this pathway, central government takes a leading role in ensuring the delivery of large-scale, secure, low-carbon electricity supply, through the creation of a Strategic Energy Agency and the issuing of contracts for tranches of low-carbon supply (see Table 2). Large energy companies have a key role in delivering these investments, and so have an incentive to ensure that the revised market arrangements mean that investment risks are partially underwritten by the government. Through the issuing of contracts via a bidding process, the government seeks to ensure that there is sufficient competition between the large energy companies. Large energy companies are encouraged to see the ‘highly-electric’ future as a strategic business opportunity, with increasing demand for electric heating and electric vehicles in a carbon-constrained world. This is due to the strategic choice by the government to incentivise a highly electric future, through the issuing of low-carbon supply contracts, and the fact that the energy companies see a ‘highly-electric’ future as more closely matching their technological capabilities. Consumers remain in essentially ‘passive’ role, with opposition to high levels of new build of large-scale generation increasingly tempered by, initially, security of supply (‘keeping the lights on’) concerns and then gradual acceptance of climate change, with consumers unwilling to accept significant lifestyle changes. Government incentives for further energy efficiency improvements are largely motivated by security of supply concerns. Government also plays a key role by further centralisation of the planning system, in order to facilitate new build of generation, transmission and storage networks and grid reinforcement.

5.2.2. Key risks Key risks to the realisation of this pathway include:

 carbon capture and storage turns out to be technologically or economically unfeasible;

 public opposition to higher energy service costs resulting from high levels of low-carbon investment;

 supply-side and technical energy efficiency focus means that little effort is made to incentivise behavioural changes, beyond

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600

19

Electricity Generation by Technology CHP -Other Fuels CHP -Renewable Fuels CHP -Natural Gas

500

Pumped Storage Imports Solar

400

Tidal

TWhr

Wave Biomass

300

Hydro Wind (offshore) Wind (onshore)

200

Nuclear Gas CCGT with CCS Coal CCS

100

Oil Gas CCGT

0 2008 2010 2015 2020 2025 2030 2035 2040 2045 2050 Year

Coal

Fig. 5. Electricity generation mix in ‘Central Co-ordination’ pathway. Source: See footnote 3.

purchase of more efficient appliances and switching from gas to electric heating.

5.3. Pathway 3: thousand flowers The civil society-led pathway, Thousand Flowers, envisions the growing dominance of civil society in the governance of UK energy systems (see Table 3). An initial take-up of local generation options is aided by the growth of social movements to address climate change, including the ‘10:10’ and successor campaigns and the Transition Towns movement (Hopkins, 2008), which begins to demonstrate the feasibility of small-scale solutions in many UK cities and towns. A more local bottom-up diversity of solutions begins to flourish, with local community leadership in providing decentralised generation and energy conservation options. Increasingly strong obligations on energy companies to increase the energy efficiency of their consumers are imposed by the Government. These lead to new partnerships between energy companies, local authorities and housing associations to improve the energy efficiency of existing building stock. These are marketed as saving both money and emissions, to appeal to both financially and ‘green-minded’ users. Local district heating systems in urban areas are also increasingly installed more widely, led by local government offering incentives for private investment, after initial successful demonstration in new build developments. The acceptance of local energy efficiency, generation and heating schemes are reinforced by increasing levels of environmental awareness amongst the public and focus on wider ‘quality of life’ benefits, rather than narrow economic assessments of costs and benefits, through a greater focus by Government and the media on ‘happiness’ indicators rather than purely economic indicators. Thanks to the earlier high rates of deployment, a rapid growth in take-up of both domestic and non-domestic distributed generation options occurs in the 2020s. This is led by successful new entrant energy service companies (ESCOs) and some of the large energy companies that have also adopted an ESCO business model, working together with local authorities, housing associations and community groups. This takes place alongside a

continuing focus by Government on incentives for improving the energy efficiency of existing and new building stock. Whilst some large energy companies continue to focus only on the centralised generation business model, with continuing large investments in coal CCS and nuclear power, others diversify by setting up ESCO-type business units to provide an alternative focus for the company’s growth. Electricity demand rises less than expected, despite significant penetration of electric heating and electric vehicles, as consumers demand higher technical energy efficiency of appliances and built infrastructure. Both domestic and non-domestic distributed generation achieve high levels of adoption, meeting nearly half of total demand by 2050. Greater energy efficiency improvements from technical and behavioural changes and use of microgeneration results in a 7.5% decrease in electricity demand by 2050 relative to 2009 levels. This demand is primarily met through a range of renewable energy supply technologies, including micro- and community scale biogas CHP, onshore and offshore wind, solar PV (as well as solar water heating), wave and tidal power, with some coal and gas with carbon capture and storage and remaining nuclear power stations, leading to electricity supply (including imports) in 2050 of 328 TWh, as shown in Fig. 6. The distributed renewable generation is owned and operated by individuals, community groups and small and large ESCOs, whilst the remaining coal and gas with CCS and nuclear power stations are operated by large integrated energy companies.

5.3.1. Key institutional changes and roles of actors In this pathway, individual and local communities play a much more active role in energy provision. Central government plays a key role in facilitating this, through the adoption of a feed-in tariff model, initially for small-scale generation and then for all generation, and the provision of incentives for community involvement and local investment. Virtuous cycles of change between entrepreneurial activities, advocacy coalitions, early adoption of technologies, and mobilisation of financial and human resources lead to rapid deployment of small-scale distributed generation technologies (Hekkert et al., 2007). Further regulatory changes incentivise new entrants to the market, particularly in the form of

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600

Electricity Generation by Technology CHP -Other Fuels CHP -Renewable Fuels CHP -Natural Gas

500

Pumped Storage Imports Solar

400

Tidal

TWhr

Wave Biomass

300

Hydro Wind (offshore) Wind (onshore)

200

Nuclear Gas CCGT with CCS Coal CCS

100

Oil Gas CCGT

0 2008 2010 2015 2020 2025 2030 2035 2040 2045 2050 Year

Coal

Fig. 6. Electricity generation mix in ‘Thousand Flowers’ pathway. Source: See footnote 3.

energy service companies (ESCOs), which provides a challenge for existing large energy companies, who gradually diversify their business models (Hannon et al., in review). Recent work in the transitions literature has examined the role of civil society as a source of grassroots innovation in sustainable energy alternatives (Seyfang and Smith, 2007; North, 2010; Smith, 2012). Though UK government ministers increasingly argue for the importance of social movements in catalysing a low-carbon transition, policies are still framed in the dominant market 2012, which sees individuals as passive energy consumers rather than active energy-using citizens (Nye et al., 2010). It remains to be seen if the current Conservative-led coalition government’s rhetoric of greater civil engagement in the ‘big society’ will lead to any revision of this framing.

5.3.2. Key risks Key risks to the realisation of this pathway include:

 distributed generation technologies turn out to be more  

expensive and difficult to install, particularly in retrofitting to existing houses and building of district heating schemes; there is a backlash against local solutions, with demands for central government and large energy companies to make investments to ‘keep the lights on’; efforts to reduce final energy demands are partially offset by ‘rebound effects’, in which users choose to use some of the savings to increase service demand levels.

6. Challenges for different actors in realising the pathways Scenarios or pathways to a low carbon energy system future can give the impression that a low carbon future will be relatively easy to achieve, providing that the ‘right’ choices are made. As noted in the papers by Hughes (2009) and Hughes et al. (this issue), there are dangers in invoking disembodied ‘high-level trends’ or ‘deus ex machina’ interventions that save the day to ensure that scenarios reach their intended target. In line with the arguments put forward in that paper, our work seeks to use the pathways to open up arguments about how a low carbon

electricity future can be realised and who needs to do what by when to achieve this. So, here we seek to identify challenges for the different actors in realising these pathways. Some challenges will be more severe in certain pathways, but we argue that any transition pathway will have to address some, if not all, of these challenges. (1) Challenges facing individual energy users/households: The quantification of the pathways highlights the key role of demand reductions and energy efficiency improvements in achieving any of the pathways. This raises the question of how much can be achieved through technical efficiency improvements, including the adoption of household energy conservation measures such as home insulation, and how much needs to be achieved through behavioural changes, including reducing or avoiding certain energy intensive activities. As Hargreaves et al. (2010, this issue) show, energy choices are embedded in behavioural practices or routines that have cultural meanings and may be hard to change. They argue that individuals and households have largely had a passive role as energy consumers, but that efforts to raise the awareness or visibility of people’s energy use do not always result in more energy efficient and durable choices. We argue that realising transition pathways, particularly those such as Thousand Flowers that involve a much more significant role for decentralised energy generation and provision, will require more energy users and households to take a more active role in energy service provision. This more active role could include (Nye et al., 2010):  Facilitating deliberate energy conservation measures through changes in the visibility of energy, e.g. the use of smart meter visual energy displays;  Changes in habits/routines or shift to more sustainable lifestyles, such as reduction of car use;  Changes in shared understandings of ‘proper’ energy use, e.g. in socially-acceptable frequency of taking showers (Shove, 2003);  Increasing demand for, and new uses for, low-carbon/ more-efficient technologies (potentially leading to rebound effects);

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 Increasing political action to ensure that any limitations on energy use are shared equitably between different groups. However, this level of changes in people’s energy use practices and level of engagement with energy systems would not be realised easily, and would be unlikely to occur without wider changes in social attitudes towards focusing on ‘quality of life’ benefits, rather than narrow economic benefits. Hence, in addition to the social and technical innovation at the niche level described in the pathway narrative, the Thousand Flowers pathway would likely require broader societal change at the landscape level, in order for this innovation to successfully challenge the dominant energy regime. (2) Challenges facing social movements: The pathways demonstrate that the transformation needed in energy systems to meet carbon reduction targets, whilst maintaining energy security and affordability of energy services, will require radical changes to patterns of electricity supply, distribution and demand. Because of the fundamental role that energy services of heating, lighting, power and mobility play in people’s lives, these changes will be inherently politicallycharged. This can already be seen, for example, in local protest groups springing up to oppose the building of wind farms in their locality. These groups raise issues about the effectiveness of the technology in contributing to mitigating climate change, as well as concerns over direct impacts such as noise and on visual amenity. On the other side, groups such as the Transition Towns movement (Hopkins, 2008), are advocating the need for communities to take a much greater role in energy provision to combat the challenges of climate change and peak oil. Our Thousand Flowers pathway explores a low carbon future in which this type of argument becomes much more widely accepted. It seems likely that these types of political conflicts will mean a much greater role for social movements in seeking to influence the rate and direction of any future low-carbon transition. We argue that social movements could play a range of roles in transition pathways. These could include lobbying government to introduce stronger targets, policies and measures, to countervail lobbying by big energy firms; demonstrating the viability of alternative solutions, by enabling social as well as technological learning in niches; creating a wider coalition of progressive energy users, generators and analysts; and proposing alternative visions for a future low-carbon society (Berkhout, 2006). Our transition pathways suggest that the shape of a low-carbon, highly electric future is still very much open, and that social movements could have a significant role in shaping this future. (3) Challenges facing market actors: Market actors, such as large energy firms, recognise that energy futures are increasingly uncertain and testing. The Market Rules pathway suggests that high levels of investment in a range of large scale low-carbon generation technologies would be needed to meet increasing electricity demands, whilst ensuring security of supply and affordability to energy users. This raises political as well as economic challenges for market actors. It may require new modes of engagement with government and civil society actors, as well as the traditional modes of behind-the-scenes lobbying and limited engagement with their customers as bill-payers. The extent to which energy firms are willing and able to engage in open transparent debates about alternative energy futures is likely to influence their credibility and ability to garner public support for potentially unpopular energy options. Along with their existing set of skills and capabilities and willingness to develop new skills and capabilities, this

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will influence energy firms’ strategies in relation to choices, such as  What mix of low-carbon generation technologies to invest in?  How much effort/investment to put in UK rather than their other markets?  Whether to engage with or resist market developments such as ESCOs?  How to respond to changes at landscape levels, such as changing public opinions on the relative strength of climate change mitigation, energy security and energy service affordability issues?  How to respond to changes at niche levels, such as innovation of new small-scale renewable technologies? Our transition pathways suggest that the answers to these questions will depend, at least in part, on how market actors envision the future, and how they think that other actors from government and civil society will act. The high levels of social as well as technological uncertainty about the future suggest the value of business strategies that engage with a range of actors, and that keep a range of options open, both in the range of low-carbon technologies to invest in, and in the type of business model and engagement with consumers to be followed. (4) Challenges facing policymakers: Finally, low carbon transition pathways raise acute challenges for government actors. The Central Co-ordination pathway would give government actors greater direct influence over the future evolution of energy systems, and would force governments to make explicit choices in the trade-offs between low carbon, security of supply and affordability objectives that are currently implicit in market and regulatory framework decisions. However, different choices are likely to be unpopular with different sections of society, and so would require high levels of political leadership in what may be increasingly socially and economically uncertain times. Hence, government actors may be tempted to just set the broad framework and incentives, and leave the tough choices to either market actors, as in the Market Rules pathway, or civil society actors, as in the Thousand Flowers pathway. These two pathways face different types of risks and uncertainties. In the Market Rules pathway, the main uncertainties relate to the technical and economic feasibility of delivering the large-scale low carbon generation technologies of carbon capture and storage, nuclear power and offshore wind, as well as to whether social concerns over security of supply and climate change would overcome the public resistance to any or all of these technologies. In the Thousand Flowers pathway, the main uncertainties relate to the technical and economic feasibility of distributed generation technologies, and to the realisation of behavioural as well as technological changes needed to achieve and sustain high levels of energy service demand reductions.

In the end, choices also relate to the trust in different actors to deliver. Policymakers are used to working with large market actors and the dominant political philosophy in recent years has been that, given the right incentives, markets and market actors will deliver socially beneficial outcomes. Despite rhetoric relating to getting government out of the way, policymakers are typically reluctant to give away power, particularly to diffuse groups of civil society actors and new market entrants, when they will still be held responsible if outcomes of carbon reductions, security and affordability are not met. This again suggests that broader landscape level societal changes in relation to decentralisation of

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political power would be needed for a civil society-led pathway, such as Thousand Flowers, to be realised. Nevertheless, political choices made either explicitly or implicitly by central government policy-makers, for example, in terms of the relative importance assigned to the different objectives of low-carbon, security and affordability, and in the roles that community groups could play in energy systems, will strongly influence which, if any, of these transition pathways will be realised. This suggests the need for a deeper public debate on the desirable features of a low carbon energy future and the relative priorities of different objectives that energy systems could contribute to, in the context of a wider debate on what a sustainable economy and society should look like. As we have argued, current UK government policy is in some ways seeking to find a middle ground between our Market Rules and Central Co-ordination pathways, by reforming electricity markets to provide greater confidence in investment in lowcarbon generation options, but still with a strong expectation that large energy firms will be the key actors in making these investment decisions. It remains to be seen whether or not this is a stable position, but it may be unwise for policymakers to believe that this is the final reform of electricity and other energy markets that will be needed to achieve these challenging long-term objectives.

7. Discussion and conclusions This paper has reported ongoing work developing and analysing transition pathways to a low carbon electricity system in the UK. As noted above, this work aims to ‘open up’ the discussion space relating to different pathways to a low carbon electricity future, as well as analysing particular technical, social, economic and environmental challenges that would be raised in realising any of these pathways. Hence, throughout the course of development and analysis of the pathways, we have engaged in a process of dialogue and consultation with a range of stakeholders through interviews, workshops and small-group meetings, including with policymakers, regulators and advisors (Department of Energy and Climate Change, Ofgem, Committee on Climate Change); industry (E.On, National Grid and other energy companies); and nongovernmental organisations (WWF, Centre for Alternative Technology). This process of engagement has proved valuable to the researchers and, hopefully, also to the stakeholders, though, of course, the responsibility for any features and analysis of the pathways remains with the researchers. We next discuss what we argue are some valuable and distinctive features of our transition pathways approach, in relation to five main points. (1) Exploring the scale of the challenge: By articulating in more detail the actions needed by different actors, these pathways help to emphasise the scale of the challenge in transforming UK electricity system to contribute to meeting the UK’s target of an 80% carbon emissions reduction by 2050. In contrast to other recent scenarios (CCC, 2008; DECC, 2010a; Skea et al., 2011) that focus on technological choices and economic aspects, our transition pathways shed more light on the wider interacting changes in technologies, institutions, business strategies and user practices that will be necessary for these scenarios to be realised. Our approach to exploring transition pathways also facilitates learning from past energy transitions (see Arapostathis et al., this issue), and exploring how different actors may shape future transitions in response to unexpected or unplanned events at branching points (see Foxon et al., this issue).

(2) Examining how pathways are shaped: The transition pathways approach draws on other forms of scenario analysis that aim to ‘‘use the imagination to consider alternative future situations, as they may evolve from the present, with a view to improving immediate and near-term decision making’’ (Hughes, 2009). It aims to implement the ideas that have shown to be ‘strategically effective’ in past scenario processes (Hughes and Strachan, 2010). Each pathway is described in terms of the particular actors within the system, and the effects of the possible actions they could take. The pathways start from present realities and aim to describe how a set of possible futures could plausibly evolve from the current situation. Our approach combines a multi-level perspective on transition dynamics with an ‘action space’ approach that enables investigation of the roles of different actors in processes of change. This approach examines how different actors from government, markets and civil society use different ‘framings’ or ‘logics’ as to what the most important or relevant factors are to them. We explore three different pathways, in which government, market or civil society ‘logics’ dominate respectively, while recognising that in practice the prevailing governance mode may swing between these modes, with forms of hybrid modes a real possibility. (3) Combining quantitative and qualitative analysis: In our approach, we begin by developing narrative descriptions of the three core pathways, highlighting the interactions between activities and process at different levels, and the roles and interactions of different actors. In order to examine some of the technical issues relating to realising a pathway, we have undertaken a basic quantification and systems analysis of the demand and supply characteristics of these pathways, described in subsequent papers in this special issue. This has enabled the research teams to undertake further analysis of key technical issues that need to be addressed for pathways to be realised, such as extension of grid infrastructure and the development of more electrified heat and road transport systems, as well as key social issues that will influence the evolution of the pathways, such as how people use smart meter displays (also described in other papers in this issue). Drawing on a range of sustainability appraisal tools, this enables us undertake a whole systems analysis of the pathways, including key environmental impacts on a life cycle basis, rather than just an end use basis. As described in Section 3, we have followed an iterative process on the development of our transition pathways that has enabled the insights from these detailed technical, social and whole systems analyses of the first iteration of the pathways to feed back into the second iteration of the pathways described here. (4) Considering risk, uncertainty and learning: The pace of innovation and deployment of new technologies, and changes to institutions and regulatory frameworks, business strategies and social practices are all highly uncertain. Hence, our work explores the plausibility and acceptability of future pathways, rather than making statements about the likelihood of different pathways. Beyond this, our work also seeks to inform ways of thinking about and, where appropriate, managing change in energy systems. This is reflected in the alternative governance framings for the pathways. These examine alternative roles that different key actors could play and envisage others playing in managing change and, hence, the alternative outcomes that could result. These result from the different priorities that actors put on key variables such as mitigating climate change, ensuring energy security or reducing costs to consumers. We argue that this approach is useful in highlighting the implications of a range of uncertainties, including future progress in different energy technologies; the role of

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ICTs to help facilitate change through a ‘smart grid’; the role of changes in actors’ habits, practices and wider social values; and how these change might interact with technological changes. Our pathways highlight both the potential for learning opportunities and also the role and resolution of conflicts between different actors. (5) Identifying challenges raised for different actors: Our approach argues that different transition pathways arise through choices made by different actors in relation to the incentives and barriers that they face, and by competition between the different ‘logics’ or framings of key issues that these actors bring. This highlights a range of challenges for individuals/ households, social movements, energy firms and policymakers to the realisation of any of these pathways. However, we recognise that there are also limitations of our approach. As noted, the translation of narrative storylines for the pathways into quantified scenarios relied to some extent on expert judgments by the researchers. This introduces the potential for conscious or unconscious biases of the researchers to be reflected in the pathways, though the iterative and collaborative process of quantification aimed to minimise this. Furthermore, the fact the quantification was based on a relatively simple spreadsheet analysis, rather than a more sophisticated technoeconomic model, means that there may be concerns relating to the feasibility and self-consistency of the particular mix of options envisaged in the pathways, though the use of particular models to analyse the feasibility of the pathways aimed to address this. In particular, the expected cost of different options was not an explicit input into the development of the pathways. Further work is currently examining the potential investment costs associated with the pathways. Initial results suggest that all three pathways would face high cumulative investment costs, but that these costs would be broadly similar across all three pathways. However, it is clear that expected investment costs, tradeoffs between capital and operating costs of different technologies and resulting implications for affordability of energy services, would all significantly influence the realisation of any of the pathways. The Transition Pathways Consortium aims to address these issues in further work. Nevertheless, by developing and analysing pathways with different and shifting roles for government, market and civil society actors and potential branching points on these pathways, we hope that this initial work has usefully explored alternative visions of a low-carbon electricity future, and can inform how choices made by actors within the system could lead to the realisation of a secure, affordable and low-carbon future.

Acknowledgements This paper draws on research undertaken as part of a major research grant jointly by the UK Engineering and Physical Sciences Research Council (EPSRC) and E.ON UK (the integrated energy company) to study the role of electricity within the context of ‘Transition Pathways to a Low Carbon Economy’ [Grant EP/F022832/1]. We are grateful to these sponsors, as well as for the interchanges with the main UK academic partners at the University of Bath (Prof. Geoffrey Hammond), University of Cardiff (Prof. Peter Pearson), University of East Anglia (Prof. Jacquie Burgess), Imperial College London (Prof. Goran Strbac), Loughborough University (Dr. Murray Thomson), University College London (Dr. Neil Strachan), University of Strathclyde (Dr. Graham Ault, Dr. Stuart Galloway and Prof. David Infield), University of Surrey (Prof. Matthew Leach), and the researchers and Ph.D. students associated with the project; see www.low

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carbonpathways.org.uk for a full list of those involved. The views expressed in this paper are the responsibility of the author.

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