Abstract
This paper examines how actors in the UK electricity sector are attempting to deliver investment in low carbon generation. Low carbon technologies, because of their relative immaturity, capital intensity and low operational costs, do not readily fit with existing electricity markets and investment templates which were designed for fossil fuel based energy. We analyse key electricity market and infrastructure policies in the UK and highlight how these are aimed at making low carbon technologies ‘investable’ by reducing uncertainty, managing investment risks and repositioning actors within the electricity socio-technical ‘regime’. We argue that our study can inform contemporary debates on the politics and governance of sustainability transitions by empirically investigating the agency of incumbent regime actors in the face of uncertainty and by offering critical insights on the role of markets and finance in shaping socio-technical change.
Highlights
An important feature of electricity systems is their capital intensity
We provide an understanding of the emerging relationships between policy, investment and electricity markets, and by illustrating new mechanisms for investment risk allocation between public and private actors we pose critical questions for research on the politics of governance of sustainability transitions
Fifteen interviews were conducted during 2013, three were with employees of incumbent energy utilities, five with investment professionals, three with individuals who invest in small scale decentralised technologies, one non-governmental organization professional campaigning for more sustainable pensions investment practices, one with a CEO of an investment industry body which promotes sustainable and low carbon investment, and two with officials in key energy focused government agencies who regularly interact with investors
Summary
An important feature of electricity systems is their capital intensity. Infrastructure assets, whether this is electricity generators, transmission lines or transformers, require significant. The rationale for this low carbon investment orientated strategy is that it will reduce the UK’s exposure to volatility in global fossil fuel markets and give certainty to investors that the UK is committed to a low carbon pathway, reducing the cost of capital of large infrastructure investment We critically analyse this process by relating insights on risk and uncertainty to the literature on sustainability transitions which analyses structural changes to resource intensive socio-technical systems necessary for key societal services like electricity, heating, shelter and transport (Steward, 2012). This brings to the fore Fligstein’s insights and those of institutional economists on the role of government intervention and hierarchy in providing stability in markets during periods of uncertainty
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
