IGov: Innovation, Governance and Affordability for a Sustainable Secure Economy
IGov is a four year research project aiming to understand and explain the nature of sustainable change within the energy system, focusing on the complex inter-relationships between governance and innovation. The project is housed in the University of Exeter’s Energy Policy Group and is funded by the Engineering and Physical Sciences Research Council (EPSRC). Our approach is to examine theories of change alongside actual practice in the UK and a number of comparison countries. The ultimate objective is to develop a framework for governance that better enables practices to change and the UK to move towards a sustainable, secure and affordable energy system. IGov is about new thinking for energy.
Tackling climate change whilst ensuring energy security and affordability is a key challenge facing energy systems within the UK and internationally. The goal of moving towards a more sustainable, low-carbon economy implies the need for a radical transition in the way that energy is both supplied and used. Such a change relates not only to the technologies that are developed and deployed but also the wider political, social, and economic institutions and infrastructures in which they are embedded. This is a dynamic and complex process. The interactions between these factors and the choices made by the different actors within the energy system, including policy makers, large firms, new entrants, investors, and consumers, all influence the way that change occurs. A key issue is how commercial actors make money within the system, i.e. how firms develop and maintain their position, make investment decisions and develop business models.
The IGov project takes a systems approach to better understand the underlying context and nature of change in three parts of the energy system – electricity, heat, and end-use demand – with a special focus on affordability. The approach is informed by theories that consider how change and transitions occur across innovation and governance, including institutional economics, policy paradigms, co-evolution theory and multi-level perspectives. We will develop and apply a theoretical framework for comparing the differing approaches to sustainable change in the UK, the EU (Germany and Denmark) and the US (California and Texas). This will include examining the interrelationships between energy systems, institutions, policies, rules and incentives, markets and decision-making processes; all of which influence and shape the outcomes that happen. By looking at policies and practice in each country, we hope to identify how innovation and governance influence outcomes. We are particularly interested in how different countries have approached a range of objectives, including: reducing carbon; deploying technologies; enabling investment; supporting new business models and new entrants; involving customers; reducing demand; and increasing affordability. IGov aims to highlight the implications of different approaches towards innovation and governance for the success or otherwise of moving towards a low carbon economy. The project will make contributions both to policy-making by identifying ways for the UK to move more effectively towards a low carbon transition by enabling more sustainable practice, and to the theoretical understanding of transitions.
IGov Approach and Research Questions
Our hypothesis is that the key enabler of change in the transition to a sustainable, secure and affordable economy is the governance arrangements in energy, i.e. the rules and incentives that shape the type, rate and scale of innovation in practices, and the consequent outcomes (see figure below). These rules and incentives determine the response of different actors, in terms of business practices, investment decisions, new entrants, etc. At the same time, we recognise that these “rules of the game” evolve within a political context that is partly determined by stakeholders within the energy system. IGov will start by defining and measuring sustainable energy and economy outcomes for the different study countries. We will then look at the practices and activities that have led to these outcomes and seek to identify how the established rules of the game have influenced those outcomes. We will look at the underlying political and institutional processes that have shaped the rules of the game in each country. From this understanding IGov will put forward arguments for governance change in the UK to enable a speedy transition to a sustainable economy.
IGov’s initial research questions are therefore concerned with:
- What is happening in different countries – i.e. what innovation is occurring in terms of affordability, demand, low carbon, etc., at the outcome and activity levels above?
- Which rules of the game explain those differences – i.e. where there are differences in outcomes between countries, why is this?
- What can we learn from this for making changes in the governance for energy in the UK to get these better innovation outcomes?
The IGov research is based on a number of work packages split over three phases:
- Phase 1 involves examining the literature on theories of change and identifying a number of measures of innovation and governance
- Phase 2 will examine what is happening in practice – in terms of demand side, affordability and distributional effects, heat and power – looking at the UK, EU and US
- Phase 3 brings together the theory and practice to provide new thinking and policy recommendations for innovation and governance for a sustainable, secure and affordable energy system.
Throughout the research the IGov team will be producing working papers, journal articles, presentations and wider discussions on new thinking for energy; these will be added to the website on an on-going basis though our research pages. We will also be running a series of workshops and conferences that will be advertised through the IGov website. To receive updates about our research and workshops, sign-up for the IGov RSS feed.