Governing for Innovation Without Disruption in Energy Systems

Prof Catherine  Mitchell, University of Exeter Energy Policy Group, United Kingdom

The energy systems of some countries are undergoing rapid change of technology use (supply, demand and operation), energy economics, customer and social preferences and public policy and governance. This is driving new means of system operation, new business models, new products and entrants and new roles for the regulator, system operator and distribution networks. Other countries (and businesses) may not be undergoing such practice change but are ‘pausing’ as they wait and see what the impacts of these practice changes are. The governance of some countries appear (1) to be lagging technology, business model and customer preference changes which may lead to disruption; or (2) some countries attempt to provide a solution to ‘new’ energy system challenges with conventional ‘economic’ regulatory tools, which inevitably fail, again which may lead to disruption.  This paper describes the challenges of current energy systems; the changes which are occurring in certain countries or US States – particularly Germany and NY State; and what this means for the general trend of governance in energy systems around the world (policies, institutions, rules and incentives). It argues that ‘new’ energy system challenges require ‘new’ thinking and new governance to enable new pathways of value for new businesses and new entrants. A few countries are showing this leadership, and this paper argues that the form of governance in those countries will spread globally as the norm over the next few decades.