Reflections on the AAG Annual Conference

Earlier this month, I had the opportunity to attend my first American Association of Geographers conference to present preliminary findings from the EVALUATE project, and what an experience it was! I eased in to my trip with a boat trip around San Francisco Bay to celebrate the recent launch of the Global Development Institute at the University of Manchester. It was great to connect with researchers in the fields of international development and economic geography, and to hear about the ways in which issues relating to adequate energy services cut across their own research.

Around 8,500 delegates gathered for a jam-packed week of conference sessions across the whole spectrum of geography. Some of the stand out sessions that I attended included:

  • Theorizing Energy Transition in the Global South, organized by Jeff Popke and Conor Harrison. During these presentations we were introduced to some of the challenges of managing energy systems within informal settlements in South Africa, how solar energy is not perceived as electricity by some residents, and issues of energy security in Chile. Presenters also talked about the conflicts that can occur when there is a plurality of actors involving with producing energy futures, the lack of transparency provided in renewable energy investment programmes in South Africa, the contested role of private sector delivery of development pathways, and the oil assemblage in the Caribbean.
  • Two sessions on Critical policy mobilities: thickening theorizations of circulated knowledge, organized by Astrid Wood. My own background in social policy is grounded in the traditional policy transfer literature, so it was interesting to learn how this discourse builds on the policy transfer concept. From the speakers assembled for these sessions, it was evident that the policy mobilities literature offers a more flexible framework that is able to account for the messiness of real life policy circuits, with circulation of ideas and politics up and down, back and forth. The role of policy activists, also sometimes referred to as transfer agents or policy entrepreneurs, was a strong theme across many of the sessions, as was the importance of recognizing the role of historical legacies and path dependency in hindering or enabling certain policy approaches.
  • Rachel Macrorie and Matt Watson’s session on Reimagining ‘smart’ and low-carbon urbanism offered a diverse critique of ‘smart’ low-carbon innovations and sustainable urban transitions, through the lens of social practices. During this session we heard how infrastructures and practices are in a recursive relationship, and were introduced to the concept of infrastructuruation. Presenters also discussed the application of socio-temporal approaches, the role of behavioural change and politics of participation, as well as the prevailing techno-rational approaches taken by policymakers to date, such as in UK housing policy, which fails to account for individual energy needs and practices.
  • Fellow CURE member Jana Wendler and Tim Edensor organized a really thought-provoking session on Playing with methods, which introduced attendees to the use of dynamic playful methods within research practice. The presenters outlined novel work on graffiti and street art in Norway based on psychogeography, the integrated nature of surveillance society within the urban fabric, and using play during fieldtrips with students – which involved some audience participation!

My own presentation formed part of a double session on Affective and Emotional Spaces of Vulnerability, organized by Simon Dickinson and Sarah Tupper. These sessions critiqued the notion of vulnerability, and provided insights into the spatial and geopolitical aspects of vulnerability. Presentations ranged from discussions on medical waiting rooms, older people’s practices and performances of post-disaster recovery, art practice, refugee, immigrant and asylum seeker status, through to my presentation, which explored the legal concept of ‘vulnerable customers’ within EU energy policy, and the implications this had for energy vulnerability in Europe.

Within this presentation, I drew attention to the de facto usage of the term vulnerable customers by the European Commission since 2003 when talking about energy poverty. I also outlined the present situation in which many EU countries have limited their new definition of vulnerable customers to just households receiving key social welfare benefits, such as disability-related benefits, and/or unemployment assistance, which has wide-ranging implications. Firstly, this approach fails to recognise the specific energy needs and practices of households, secondly, there are related issues of narrow eligibility, significant downward steps or ‘cliff edges’ in entitlement to support at particular income levels, and low uptake of social benefits in some countries. Furthermore, it diverts attention away from other core infrastructural issues that are driving energy vulnerability, such as housing stock quality, and access to energy carriers. In sum, I stated this new approach is likely to create and reinforce the policy marginalisation of some household groups, especially those already affected by austerity agendas.

Casanova district: planning an exemplary urban development in Italy

Roberta Pernetti and Marco Castagna present urban planning processes in the city of Bolzano and their monitoring research

City of Bolzano had a severe problem of lack of housing, thus in 2000 the Municipality of Bolzano decided to start an important urban operation, acquiring a large port of land in the South-West of the city and managing directly the whole process aimed at:

  • Ensuring quality and efficiency of the urban processes;
  • Enhancing environmental performance of the buildings;
  • Implementing a model settlement with high quality of life and valorisation of the suburbia.

The result of this operation is the Casanova district, which provides accommodation to about 3,000 people in 950 apartments grouped in eight building castles. The owners of the buildings are the local Institute for Social housing of South Tyrol (IPES) and a series of local cooperatives, a mechanism based on the association of a group of people that pool resources to build their housing.

The Municipality of Bolzano was strongly committed to adopt the best practice with regard to newest technologies and quality of life in the planning of a new urban quarter. This choice has allowed the Municipality to define and set specific and ambitious standards with special attention to the social services and sustainable transport for the inhabitants. In this regard, the Municipality established a new train station on the railway connecting Bolzano to Merano, ensuring the connection with the city centre in a few minutes.

The approach used in the design included measures at different levels: the urban planning concept, the energy concept and the architectural competitions for individual lots.

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General view of Casanova quarter (source: Google maps)

The urban concept

An interdisciplinary team coordinated by Fritz Van Dongen from Amsterdam developed the design concept. The team planned the construction of eight so-called “castles”, which consist of 3-4 buildings built around a common green space. The urban concept gave substantial freedom to the designers in terms of architectural and technological solutions of individual castle projects.

During the first six months of the urban design, the team organized six workshops in Bolzano with the direct involvement of the political and technical representatives of the Municipality of Bolzano, representatives of utilities, IPES, cooperatives and the board of the district.04Castelli

One of the eight castles of the Casanova district (photo credits: EURAC)

The energy concept

The energy concept considered three main objectives: reduction of the heating energy needs, minimizing the use of traditional energy sources and increasing use of renewable energy sources.

To achieve these goals, the concept set a district heating system with heat recovery from an incinerator and guidelines on energy requirements for individual lots.

The Municipality set the energy requirement for heating energy use between 30 and 50 kWh/m² per year, depending on the heated space of the buildings. This target was ambitious in comparison to the minimum building performance set by the national energy policies (Law n.10/1991) that require a maximum value of 90 kWh/m2 per year for heating energy demand.

Therefore, all buildings were planned to include high levels of insulation, some buildings were equipped with ventilation systems with heat recovery and, in order to optimize the passive gains, the designers coordinated and optimised the height of the buildings in the Casanova district in relation to their position in order to reduce the shadowing effects.

Each building was planned to cover part of its energy needs through renewable energy sources, i.e. solar and geothermal energy. Solar energy has been implemented with solar thermal collectors for domestic hot water production and grid connected photovoltaic systems for electricity production. Some buildings were deigned to cover a part of their heat demand with geothermal heat pumps and by direct airflow through a geothermal pre-heater.

The Ministry of Environment, Land and Sea included Casanova district within the campaign “Sustainable Energy Europe (SEE)” promoted in Italy. The City, the Province and the district itself are considered as good example at the national level of implementation of energy efficiency and use of renewable sources to reduce CO2 emissions.

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Casanova district (photo credits: EURAC)

Monitoring by EURAC

As a concrete action within the active partnership with the Italian Ministry of Environment, in the context of the implementation of the SEE campaign, EURAC was in charge to carry out the monitoring of the Casanova district. The entire monitoring campaign aimed to evaluate the actual energy performance in comparison with the design values (predicted), and to analyse the level of comfort (air quality, temperature and humidity) in a set of sample apartments. In addition, EURAC distributed specific questionnaires to the users in order to evaluate their energy saving awareness and the perceived level of comfort. The results of the monitoring campaign will be the basis to develop an educational campaign for the users in order to foster positive behavioural changes. In general, the results of the monitoring campaign highlighted an important rebound effect of the users that, on the one hand, adopted critical behaviours in the use of non-traditional technologies (e.g. mechanical ventilation, heat recovery and massive heating system) and, on the other hand, required higher comfort levels contributing to worse the energy performances of the building operation. A preliminary round of trainings started within the ASP project CABEE (Capitalizing Alpine Building Evaluation Experience), that promoted the educational campaign “An efficient building needs you!”. The participation was quite active and, in parallel to the seminars, EURAC distributed a short guide on how to use energy in an efficient manner in the buildings in different seasons while ensuring high indoor comfort level. Electricity saving advice was provided as well.

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The guidelines for energy efficiency and energy saving in Casanova district (in Italian) (source: EURAC research)

EVALUATE fieldwork update

EVALUATE’s qualitative fieldwork has progressed very well over the last two months.  In Budapest much of this work has been conducted by Dr Gerda Jónász.  I was able to visit Budapest for a week in February and join Gerda on several interviews, undertaking some myself with those who were comfortable speaking English.  Although at this early stage it is only possible to provide very preliminary findings, it was clear that several of the participants were experiencing difficulties in affording their energy bills (in line with EVALUATE’s earlier quantitative findings from Hungary) and were thus forced to limit their consumption.  For example, one household was restricted to using their electric heating system only at times when the children were home, and had to visit family members at the weekend to use hot water for a shower.

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One of the participants draws the floor plan of their home whilst chatting with Gerda

A lack of home insulation, inflexible district heating systems, and even the physical positioning of windows (one flat with north-facing windows couldn’t gain much passive heat from the sunlight, and so was often cold and needed more heating) all variously featured as reasons for people’s difficulties.  Gerda has been making great progress despite working mostly alone, and our realistic aim is to have the fieldwork conducted by the end of April.

Meanwhile, fieldwork in Skopje has also been progressing well.  Nevena Smilevska, of the Centre for Environmental Information and Research, has been assisted by Stefan Maleski in undertaking the research here. Saska Petrova from the EVALUATE team in Manchester was also able to join on a few of the household interviews.  Like Gerda in Budapest, Nevena and Stefan have also worked very hard and efficiently, and they aim to have all the fieldwork completed by mid-April.

In Gdansk, the qualitative fieldwork has now finished and our local researcher Jan Frankowski is busy completing the interview transcriptions. And in Prague, Saska Petrova is now in the middle of undertaking several weeks of in-depth fieldwork.

The overall impression from across the different case study cities has been that the data collection – and the method of using two in-depth interviews interposed with a personal ‘energy diary’ – has gone very well. The energy diary has proven very effective in helping participants to reflect on the everyday practices that they might usually take for granted, allowing detailed discussions to take place in the second interview.

As we begin to receive the transcripts from the various interviews, my next task will be to conduct an in-depth and rigorous analysis in order to identify key themes and findings.

Call for participants: Advances in European fuel poverty research and practice

Advances in fuel poverty research and practice: a pan-European early career researcher symposium

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20th September 2016, University of Manchester, UK

Applications are sought from postgraduate and early career researchers (ECRs) in all disciplines for a sponsored pan-European symposium on domestic energy deprivation. Participant registration is now also open (details below).

Domestic energy deprivation – which is often recognised via the terms ‘fuel poverty’, ‘energy poverty’, and more recently ‘energy vulnerability’ – is prevalent across Europe. Indeed, an estimated 52.1 million households across EU27 alone were struggling to attain adequate warmth, pay their utility bills on time, and live in homes free of damp and mould in 2010 (Thomson, 2015). The adverse impacts experienced by fuel poor households include compromised living standards, lower educational outcomes, and exacerbated health risks. Fuel poverty is gaining increasing acceptance as a significant global policy issue (Bouzarovski and Petrova, 2015), as reflected by the emergence of numerous national and supranational policy frameworks. However, to date there has been a chronic lack of integrated discussion and interpretation of the problem within the wider scientific and policy community, which may have contributed to the relative marginalisation of policy responses, and prevented the development of knowledge on the issue.

To address the fragmentation of approaches to the challenge of fuel poverty across national and disciplinary boundaries, this symposium seeks to provide a supportive physical and virtual forum for ECRs from all disciplines to:

  • Share emergent research on or related to domestic energy deprivation;
  • Consider the development of an integrated and innovative conceptual framework for the research and amelioration of fuel poverty;
  • Develop national and international collaborations with public policy officials and civil society;
  • Further strengthen the existing multidisciplinary network of researchers from across Europe;
  • Foster a new generation of scholars and practitioners in this field.

The symposium will feature guest talks from Professor Stefan Bouzarovski, a leading academic in the field, as well as from key decision-makers involved with setting national and pan-European policy agendas. Thereafter, attendees will have the opportunity to give short presentations on their own work. The event will conclude with interactive small group discussions on the current barriers to researching fuel poverty, the ways in which the work of attendees might be disseminated in order to support policy development and practical eradication of fuel poverty, and potential for future interdisciplinary collaboration and networking.

This event is held in partnership with National Energy Action (NEA), one of the UK’s leading fuel poverty charities. As part of this collaboration, Eaga Charitable Trust has kingly agreed to provide bursaries for up to 12 ECRs to attend NEA’s annual conference ‘Innovation, Community, Education’ (21st to 23rd September in central Manchester) free of charge and, in addition, receive funding towards accommodation and travel costs associated with attendance at the symposium and NEA conference. NEA has generously offered stand space in the Community Hub at their conference, which ECRs could use to display poster presentations of their research. NEA’s annual conference attracts over 300 delegates from several sectors engaged with the issue of fuel poverty and energy efficiency, comprising: national and international NGOs; energy supply and distribution industries; technology manufacturers and installers; health and social care sector; housing and environmental health; academics; and the community and voluntary sector. For remaining symposium participants, the EVALUATE project at the University of Manchester can provide limited support towards travel and accommodation.

Application process:

To apply to present at or participate in the symposium on 20th September, and to also register interest in attending NEA’s annual conference (21st to 23rd September), please complete and return the Application Form. Within this form you can specify if you would like to be considered for either of the two sources of assistance detailed above – explaining why you need them, and providing the total amount and a breakdown of the funds requested. We note that recipients of the 12 Eaga Charitable Trust bursaries will be expected to attend the NEA conference as well as the symposium. As funds are limited, applicants may not receive the full amount they have requested; priority will be given to those without access to other travel funds.

The deadline for all applications is Wednesday 4th May 2016. Applicants will be informed of the outcome within two weeks of the closing date. Please contact Dr Harriet Thomson (harriet.thomson@manchester.ac.uk) if you have any queries.

Publication of papers:

Following the symposium, all speakers will be invited to submit full-length papers of their presentations for consideration for publication as a chapter in an edited book on energy deprivation.

Funds for this event were kindly provided by Eaga Charitable Trust and the European Research Council-funded Energy Vulnerability and Urban Transitions (EVALUATE) project, University of Manchester. The event is held in collaboration with NEA.

New book: Retrofitting the City

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Retrofitting the City: Residential Flexibility, Resilience and the Built Environment. By Stefan Bouzarovski (London and New York: I.B.Tauris, 2016, 288 pp. £68 Hardback. ISBN 978 1 78453 150 8)

By Alastair Moore

A decade of research and consultations with residents, policy-makers, intermediaries and academic experts across a wide range of cities and countries provide the empirical and theoretical fuel for Stefan Bouzarovski’s most recent monograph, Retrofitting the City. The purpose of his project is to synthesize previously disconnected debates in geography, urban sociology and architecture as a means to theorize the ‘flexibilization of home’. In this endeavour the author succeeds as the book retrofits the conceptual landscape underpinning processes of urban resilience, flexibility and residential adaptability. Bouzarovski opens our eyes to the shortcomings of the crude binary representation of housing transformations dominated by a ‘kinetic elite’ on one side of the ‘space of flows’ (Castells, 2002), and a socially disadvantaged on the other.

To overcome the shortcomings of this dualism, Bouzarovski undertakes a systematic, rigorous and critical look at the epistemological archaeology of adaptability, flexibility and resilience, and fuses this with the realities of the second demographic transition and the geographies of quotidien. His exploration of the reciprocal relations between the structural and agentic dwelling, or ‘fluid vessel of multiple socio-technical networks’, and the internal features of its household, opens up a new and useful narrative for understanding the complex socio-economic contingencies arising from human and non-human dynamics and processes of household resilience and flexibility. I am particularly swayed by Bouzarovski’s argument that resilience and flexibility are co-dependent processes, rather than uni-directional responses to change. And, that people respond differentially to the physical constraints offered by the built environment and alterations in local economic context, creating a constantly evolving and uneven socio-physical urban landscape.

Bouzarovski employs his findings from interviews with residents in four Eastern and Central European cities to reinforce his central thesis that far from being feckless and passive, those of the disadvantaged social strata possess strong coping or ‘bricolage’ skills when faced with new housing episodes. The latter chapters explore the interconnected socio-technical assemblages that give rise to housing transformations that take place outside the financialized housing market, and rely on a web of informal household skills and knowledge, and social networks built on kin and friendship.

The book makes a valuable contribution to the literature by compelling us to rethink our understanding of the relations between household flexibility, resilience and adaptability, and the complex and non-linear process of housing transformation. For those wishing to intervene helpfully in housing and urban policy and theorizing, this book should be considered an essential read. I am confident that after reading it you will not think about housing retrofits the same again; I know I don’t.

Reporting that seeks to empower

We are delighted to bring a new guest post by Marylin Smith – the Executive Director of EnAct, a new global project focused on radically changing the manner in which knowledge on energy poverty is produced and disseminated.   

Around the world, diverse actors are engaging in innovative efforts to secure a more sustainable future by transforming energy production and consumption. Coupled to this are strategic efforts to provide universal access to clean, affordable energy – or put another way, to eliminate energy poverty.

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The Energy Action Project (EnAct) believes it is time to transform energy reporting.[1] EnAct’s tagline Reporting that seeks to empower reflects two social issues related to energy and society.

First, almost half the people in the world live in energy poverty, their lives undermined by energy systems that are inadequate, unreliable or unaffordable. In many contexts, women face higher risk of impacts from low energy access and warrant focused attention for empowerment. The second issue is extremely low levels of energy literacy: a US study carried out in 2002 found that only 12% of people could correctly answer half of 18 basic energy questions.

EnAct wants people to ‘get’ energy, whether that means gaining access to clean, reliable sources or better grasping how individual choices influence the energy system. An underlying aim is to prompt people to think about energy, every day. By exploring the personal impacts and underlying causes of energy poverty, EnAct will promote shared responsibility and collective action to boost energy access. By educating people about how energy use drives everything from production to pricing, it will prompt conscientious consumption where energy is, at present, abundant.

EnAct sees ’empowering’ people as the final step in a process that requires effort to ‘engage, explain and inform’. To this end, the project uses diverse media: web documentaries and podcasts, news stories, feature articles and editorials, and interactive/infographic content. A strong social media (SoMe) element will draw followers along a path that explores diverse facets of complex topics. With this model, EnAct will test whether the media can become an active partner in boosting energy access and energy literacy.

COLD@HOME: The pilot package

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Credit: P Madsen/EnAct

In February 2016, EnAct launched its pilot project, COLD@HOME, which investigates fuel poverty in Europe and North America. The package opens with a web documentary from Ukraine, where Katia, Stephan and Masha are among the millions facing their first winter after gas prices spiked by 280% on 1 April 2015. This provides a unique opportunity to explore how national policy – and indeed international negotiations – play out in the households of people. The dramatic increase reflected the removal of natural gas subsidies that were costing the government EUR 3.6 billion per year (4% of GDP). The International Monetary Fund made bringing prices to retail levels a condition of receiving loan assistance to deal with the ongoing economic crisis and the war in the Donbass region.

The package Features (to date) also explore the question of how much cold homes cost the National Health System in the United Kingdom and reveal levels of fuel poverty across Europe. A parallel blog, Inside, is the core of COLD@HOME: regular entries in ‘The Basics’ explain briefly key concepts such as what fuel poverty is and what impacts it has on people and society. ‘Indepth’ offers more detailed versions, authored by energy experts.

Over 12 weeks, COLD@HOME will report on the causes and impacts of fuel poverty, as well as the technology, policy and finance solutions needed to address it. Two additional elements also seek to empower followers. An Energy Diary lets people living in fuel poverty share their own stories, bringing the harsh realities they face on a daily basis into clear focus. Act Now (launching week of 14 March) will provide tips on how to save energy in the home and where to go for help, as well as suggestions for others to help those living in fuel poverty.

Next on the editorial calendar

EnAct is keen to explore energy poverty in other contexts, and is currently developing three proposals:

  • Cooking with biomass as the cause of poor health for women and children, a major driver of deforestation and the source of the upswing in the illegal charcoal trade.
  • Microgrids and other solutions for empowering remote areas – going beyond light to deliver energy for productive use.
  • How unreliable energy in urban areas undermines the success of small businesses, and thus economic and social development.

We welcome inputs for COLD@HOME, particularly blog contributions and images/stories to add diversity to the Energy Diary. We also welcome ideas for future packages.

EnAct often tells energy experts ‘think of us as the online resource that will help your friends and family begin to “get” what you do’. We have an active Facebook page with daily posts drawing attention news stories about energy and energy access; ‘Liking’ us is an easy way to add a bit of energy to your News Feed and start building energy literacy among your personal networks. We are active on Twitter as @EnActNow.

Finally, with a growing list of professional photojournalists contributing, @everyday_energy on Instagram provides high impact images of how people interact with energy on a daily basis, all over the world. With this, EnAct is building an energy image bank that it will make available to others.

[1] For a full description of EnAct’s aims and approaches, visit www.en-act.org.

CURE goes to Norway

Joe Williams reports on a recent workshop in Bergen, Norway, hosted by the SpaceLab team and attended by a group of energy and urban climate researchers from Manchester.

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CURE meets SpaceLab and Solstrand. Photo by Craig Thomas.

A group of researchers from the Centre for Urban Resilience and Energy (CURE) recently travelled to Norway for a workshop on Urban Climate and Energy Transformations.

The purpose of the workshop was to discuss core conceptual issues around urban energy and sustainability. Following the recent appointment of Stefan Bouzarovski as visiting professor at the University of Bergen’s Department of Geography, the workshop also aimed to facilitate international collaboration between CURE and the recently established SpaceLab. The Spaces of Climate and Energy Laboratory (SpaceLab), headed by Dr Håvard Haarstad, was set up to further sustained research on urban energy transformations. The multiple shared interests between CURE and SpaceLab formed the basis for fruitful and engaging discussion between the two groups.

Set a few miles outside the city of Bergen in the historic Solstrand Hotel, which was built in 1896 by Norway’s first prime minister, the picturesque views of the fjord and snow-capped mountains could hardly have provided a more dramatic backdrop to our discussions.

On the first day, our efforts were structured around small group discussions on two related themes. In the first, talk was based on the core question ‘climate versus justice?’ Here, we problematized the multiple (in)compatibilities between imperatives for climate adaptation and ecological sustainability on the one hand, and social justice on the other. Our objective was to question whether and how notions of vulnerability and equity could be integrated into more just forms of sustainable transformation. The second theme considered the role of systemic change in energy transitions/transformations. In particular, although by no means exclusively, we discussed the place of innovation as occupying a contradictory position between being a catalyst for meaningful and potentially radical techno-political change (transformation), and as a byword for business-as-usual forms of technological change (transition). The day concluded with a feedback and general discussion session.

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On the second day we were encouraged to consider more deeply our role as academics in creating or influencing change. This began with a morning discussion entitled ‘researchers as agents of change.’ In this session we considered, firstly, the multiple ways in which we can and do influence change, and secondly, the sometimes contradictory position occupied by academics in both producing scientific knowledge and engaging in normative political and social projects. After this, we travelled to the city of Bergen, where we were hosted for a lunch meeting by representatives from the municipality. The meeting involved a number of short presentations on existing and potential collaborations between CURE/SpaceLab and policymakers. PhD researcher and CURE member, Gabriele Schliwa, presented the University of Manchester’s on-going work on living labs as collaborative approach at the intersection between academia, public and private sector as well as civic society, using cycling and sustainable mobility as a case study.

Overall, the workshop provided a promising start for a potentially long and rewarding collaboration between the two groups.

Business model innovation to foster the energy transition

Guest contributor Emanuele Facchinetti discusses the changing realities of energy utility companies in the context of the energy transitions towards distributed low-carbon energy systems.

The first universal legally binding agreement on climate change recently signed in Paris represents ‘’a bridge between today’s policies and climate neutrality before the end of the century’’, as stated by the European Commission’s COP21 press release. This ambitious transition towards a more sustainable and carbon-free global energy system requires an unprecedented radical reorganization of the whole energy sector.

Across the last decennium, the long-established energy market has been exposed to a concurrence of new trends continuously increasing in momentum: the liberalization and unification of markets; the increasing market penetration of decentralised energy systems based on renewable energy or favouring energy efficiency measures; the consequent highly uncertain regulatory framework evolution; and last but not least, the global economic crisis.

As a consequence, the energy sector and its stakeholders stand today at the eve of a challenging and exciting revolution: the way energy services are generated, delivered and traded is expected to change completely in the coming years.

At present utility companies, the main actors of the energy market, are constantly losing profitability, and are therefore striving to find appropriate ways to adapt to the undergoing transition. Many of the largest European utilities, amongst others the German E.ON and EnBW, the French EDF, the Italian ENEL, and the Swiss REPOWER, in the last few months announced important reorientations of their activities mainly due to the fact that traditional business models no longer allow them to be competitive on the market.

Recently we have analysed the European and US energy markets with the objective to spot the innovative business models emerging at the current stage of the energy transition (Facchinetti and Sulzer, 2016). The analysis shows a clear tendency in favour of new business models addressing customer-owned infrastructures and focusing on customer-tailored solutions.

In order to remain in their dominant positions, utilities are urged to discontinue the adaptation of their traditional and long established business models focusing on the vertical integration of the business and with little or no customer preference consideration. Instead they should favour the development of new flexible business models built around customer’s needs and preferences. The energy transition is increasing customer autonomy, flexibility and influence. In brief, it is empowering the customers.

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Photo by Emanuele Facchinetti

Our market analysis further confirmed that, at present, large investments in the energy sector are discouraged. Indeed, emerging business models appear to generally disfavour the ownership of the infrastructures and are only timidly addressing new lucrative business opportunities opened up by the progress of ICT technologies such as the offer of comprehensive and integrated services going beyond the energy supply (e.g. including mobility, home automation and security, telecommunication services). Needless to say, this evidence is compatible with today’s global economic slowdown and changing regulatory frameworks.

Undoubtedly, the pace and ultimately the success of the energy transition strongly rely on the capability of improving the energy sector’s attractiveness to large private investments. For this purpose business model innovation and policy makers have a pivotal role. On the one side, business model innovation should support the disruptive change of value proposition and value creation logic required to spot and exploit the emerging business opportunities. On the other side, policy makers should facilitate the latter process by implementing new regulations embracing the heterogeneity of decentralised energy systems.

This last consideration is fully aligned with the vision of the recently adopted European Energy Union Strategy. This initiative emerges as a promising opportunity to tackle the design of new flexible regulatory frameworks removing the existing market barriers hindering the customers from becoming the protagonists of the energy transition.

In this perspective, the legislation coordinating the relation between the wholesale and retail energy markets should be redefined to enable/facilitate the access of customers (or aggregation of customers) to new business opportunities. New policies are expected not only to allow but also to promote the development of business models focusing on customer-tailored solutions and potentially including services going across other market segments.

Another example of required action on the policy maker’s side is suggested by the sharing economy principles. In the era of Airbnb and Uber policy makers should recognise that the energy transition could only benefit from shared ownership based business models. New regulatory framework should encourage such approaches that are not considered, or considered to a minor extent, within the in force policies.

The energy transition is enabling more and more customers to generate and store energy at their homes in a truly decentralised way. Undeniably, this will affect more and more the business of centralised energy suppliers. It is time for the energy market and its stakeholders to capitalise on this change of paradigm and play a proactive role in the transformation tailoring new service-oriented business models to their customers. And policy makers should allow them to do it. Urgently.

 

 

EVALUATE and COMBI researchers respond to energy efficiency call for evidence

A team of researchers from the EVALUATE and COMBI projects, both based in CURE, recently responded to a call for evidence on ‘domestic energy efficiency’, issued by the Westminster Sustainable Business Forum and Policy Connect.  The Energy Company Obligation (ECO) – which is the only remaining energy efficiency policy in England – is due to end in March 2017.  After this, the current aim is for it to be reformed but as yet there are no concrete details on its successor, and so now is a good time to input into future policy design.

The call covered a number of issues around energy efficiency policy, including: the ‘drivers’ of energy efficiency demand amongst households; how energy efficiency policies can reconcile the goals of reducing carbon emission whilst also tackling fuel poverty; how low-income or vulnerable households can be best targeted; and the ‘best’ ways of funding efficiency measures.

The EVALUATE and COMBI teams provided detailed responses to several of the questions in the call.  Some of our major suggestions included:

  • The importance of ensuring future energy efficiency policies are funded through a fair mechanism. The current form of levy placed on energy bills disproportionately impacts the poorest households.
  • The need for better quality advice and training for householders who receive energy efficiency measures retrofits. There is scope for ‘community’ based approaches here that foster and work with trusted local networks.
  • The need for stronger regulation and minimum-standards of energy efficiency in the private-rented sector.

If you’re interested in finding out more, much more detail is contained in our full submission, available here: CURE_Call for evidence