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Path Dependence and Path Creation in Energy Systems – A Multi-Level Perspective on Technological, Business and Policy Innovations (EnPath)

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Basic project information

Background and Objectives

Energy systems are largely characterised by path dependence. Decisions taken in the past limit the options available today. Fuel choices, conversion technologies and distribution networks involve physical, financial, governance and knowledge investments that are interdependent and mutually reinforcing. Path dependence concerns not only technology but also ideas and practices in the energy field.

By contrast, path creation – a newer concept – has been described as involving distributed and active agency, where new opportunities are created by a collective through mindful deviation. While past choices affect present and future options, they do not determine them. Innovations are crucial for change and can enable the creation of new paths.

The energy system is linked to many other systems such as the mobility, the innovation and the industrial systems that use and produce energy. These systems are affected by diverse policies, e.g. related to energy, innovation, environment and competition. Horizontal coordination of policies and vertical implementation of key objectives are central challenges.

Enpath graph

Our project focused on the energy system in Finland. Examining the current system and its interlinkages with other systems is essential for identifying the barriers and opportunities for innovations to break the system lock-ins. While energy systems have national characteristics, there are also similarities across countries (e.g. the aim for security of supply and increasingly liberalised markets). Thus, our study allows for more general conclusions regarding path dependence and path creation in energy systems.

The four interlinked objectives of EnPath were:

A. to identify factors and actors enabling and hindering energy  innovations in a multi-level (local, national, international) and multi-sector context;

B. to understand the role of both incremental and disruptive processes in energy innovation and system change;

C. to determine the impact of integrating multiple strategic goals on the emergence and diffusion of sustainable energy innovations;

D. as a synthesis of objectives A-C, to discover the possibilities for path creation in strongly path dependent energy systems.

The most important research findings and conclusions

The project combined theoretical ideas from the path dependence, path creation and transition literatures to deepen our understanding of both stability and change in the energy systems. To that end, the project constructed an analytical framework of innovation mechanisms, which identifies four sources of change – new market entrants, old incumbent companies, civic and user activity and policy interventions – and their potential interactions, and, in addition, new ways for identifying and classifying policy innovations and energy demonstrations. The project also has pointed out that two major approaches within the transition literature – the multilevel perspective and the technological innovation system framework – end up with similar empirical findings despite differences in analytical concepts.

The empirical findings of the project are based on five subprojects, focusing on different subsystems and giving different perspectives on energy system change in Finland. The case studies and their synthesis are based on novel combinations of research methods including policy analysis and evaluation, economics and innovation research. The five cases are:

I. Integration of different policy aims into policies affecting the diffusion of bioenergy: The project has demonstrated that the framing of bioenergy in the Finnish energy policy has essentially changed from the late 1970s to the 2010s. Especially new wood based energy forms – such as waste liquors of the forest industry, wood chips in heat and power production, wood pellets in house heating and wood-based biofuels in transport – have increasingly been supported by public policies. Consequently, the amount of wood energy has almost doubled during the latest two decades and the share of wood energy has reached the share of oil. On the other hand, other forms of bioenergy and renewable energy – such as biogas, wind or solar energy - has not been supported in the similar vein.

II. Intermediary organizations as promoters of energy innovations: The project has indicated that organizing capabilities in emerging energy fields is among the major factors explaining the success or failure of new innovations. In many cases public or semipublic organizations - like publicly owned Motiva-concern, the Finnish Innovation Fund Sitra or Tekes – the Finnish Funding Agency for Technology and Innovation – have taken the initiative role of organizing a new field. In some cases, on the other hand, firms have been able to organize the field by forming a trade organization – such as the Finnish heat pump association – , or by giving the role to a consulting company – such as consulting company EERA in the electric traffic field. 

III. Emerging new climate-motivated strategies in the Finnish pulp and paper and energy industries:  The project has demonstrated that the crisis of the Finnish pulp and paper industry in the early 2000s radically changed the industry’s attitude towards energy business. Earlier, pulp and paper companies focused on producing cheap energy for their own mills and were reluctant to develop new wood-based energy products. In the new context with declining paper demand in Europe, companies have invested in R&D and in new pilot mills to produce wood-based energy forms even as separate and stand-alone businesses. For example, there are some promising sings in the waste and wood based transport biofuels, but it will take still some years before the commercial success of new products and plants can be evaluated.

On the other hand, the project has found out the coal-based CHP (combined heat and power) plants in cities located in the Southern part of Finland have been very path dependent. As a case in point, the project has analyzed the development of Helen Group (Helsinki Energy), whose all major power plants in Helsinki haven been based on either gas or goal since the 1990s. Despite of many political decisions at international, national and city level, the company is still only starting to make bigger changes in its strategy and investments.

IV. Energy innovations in housing and building and transport (e.g low- energy buildings and electric vehicles):  Low-energy buildings introduced to Finland in the early 2000s. The development has later been supported by new more stringent building codes highlighting energy efficiency and the use of local renewable energy sources. However, mainstreaming low-energy housing has progressed slowly. The project has identified among the main reasons behind this lack of trust and information gaps between producers, users and societal actors in the housing sector. 

The current electric vehicle hype started in Finland as in many other European countries in 2008. The emergence of the field has been strongly supported and the field itself has been exceptionally well organized. Yet the success of the field remains to be seen. The number of electric vehicles and business around them in Finland is still very limited. The main explanation to the current situation is related to the slow international development. The supply of affordable and reasonable electric vehicles is still limited. Today, only some international big car manufacturers have introduced such plug-in electric vehicles which can penetrate into the market in the Finnish conditions in a larger extent. In the long run, electric vehicles are expected to replace internal combustion cars.

V. Adoption and diffusion of new small-scale renewable energy technologies (e.g. heat pumps and solar energy): The project has identified actors, networks and projects that led the rapid diffusion of the heat pump technology in the Finnish housing sector during the latest decades. At the moment Finland is among the leading countries in the use of this technology. The development started some ten years later than in Sweden but has been exceptional rapid since then. The special feature of this case has been the role of small and medium sized companies instead of large companies, the importance of universities of applied sciences instead of science universities, and the role of commercial activities and users instead of public support.

In the field of solar building integration, the project has studied the role of demonstrations in niche creation. The analysis was based a new classification of demonstration projects (test version, field trial and commercial rollout) with different goals in relation to internal and external stakeholders. The analysis indicated that the demonstration projects in the 1980s and in the early 2000s could not generate markets but that current demonstration in the early 2010s seem to lead more successful process generating positive expectations, learning and market diffusion.

All in all, our analysis has implications for energy entrepreneurs aiming to create new paths as well as for energy policies trying to enhance sustainable energy transitions. Both entrepreneurs and policymakers need to understand the self-reinforcing mechanisms that support the dominant path and to support the creation of new paths. A transition towards more sustainable energy systems necessitates the withdrawing of direct and indirect, economic and social supporting mechanisms, generating different piloting and diffusion projects and learning during them  in order to form a landscape where sustainable new energy technologies may develop in more favorable conditions.

 

Impacts of the project

The results of the project have been presented very broadly to achieve scientific as well as societal impacts. The results have been presented at more than 50 scientific conferences and seminars. Presentations have been given to large audiences of lay people at the Science Forum [tieteiden päivät] (2013) and Technology Forum [tekniikan päivät] (2010). A huge amount of presentations have been held for professionals at local, regional, national and international conferences and seminars. Some of these events had hundreds of people in the audience as for example the Skaftkärr-seminaar in Porvoo or the national Green Growth Summit in 2012 where two plenary presentations were based on the project. 

The results have also been used in seminars and trainings for civil servants, for example on how to assess climate impacts of governmental bills and strategies and on how to assess the impacts on sustainable development of the European Union’s structural funds. The focus of these assessments become very different from traditional ones, when they start by recognizing the strong path dependencies of present unsustainable systems and then focus on creating conditions for path creation.

In June 2012 the Prime Minister’s office commissioned a study on the opportunities for green growth by the Finnish Partnership for Research on Natural Resources and the Environment (LYNET). The study was led by the Finnish Environment Institute and the framework was largely based on the EnPath project. The report and a policy brief were published by the Prime Minister’s office in March 2013 as background material for the mid-term review of the government program and the negotiations on the government spending limits for 2014-2017. Several ministers and two permanent secretaries have expressed their appreciation of the study.

In April 2013 the Prime Minister’s office hosted three roundtable discussions about Professor Pekka Himanen’s study on the future of Finland. The presentation by Professor Per Mickwitz as background for the debate was largely based on the EnPath project. The roundtables were intended both as feedback to Himanen’s project and as background material for the Government foresight report on sustainable growth, which will be submitted to the Finnish Parliament later in 2013.

Insights from the project regarding embedded technology-society relationships are reflected in on-going contributions by Paul Upham to the International Energy Agency . Results are also used in invited contributions to practitioner conferences and panel debates organized by the UK Technology Strategy Board.

Furthermore, the results of the project have been discussed and utilized in numerous meetings and negotiations with agencies in Finland, such as Motiva, Sitra, Tekes, etc.. A long term impact is likely to occur through the use of the projects results in university education at the Aalto University School of Businesses, the University of Tampere and the Lund University.

 

Publications and Conference Papers

Academic and popular publications will be made on the basis of the case studies and the synthesis study. In addition, enhanced dialogue between researchers, industrial actors and policymakers will be promoted based on the interactive research methods, seminars and articles to a popular audience. The findings will be utilised in several university courses.

2015

Apajalahti,E.-L., Lovio, R., Heiskanen E. 2015. From demand side management (DSM) to energy efficiency services: A Finnish case study, Energy Policy, 81: 76–85.

2014

Kivimaa, Paula (2014). Government-affiliated intermediary organisations as actors in system-level transitions. Research Policy, 43(8): 1370–1380.

Upham, P., Kivimaa, P., Mickwitz, P, and K. Åstrand 2014. Climate policy innovation: a socio-technical transitions perspective, Environmental Politics, 23(5): 774-794.

2013

Mickwitz, P. 2013.“Policy Evaluation”. In Jordan, A.J. and C. Adelle (ed.) (2013) Environmental Policy in the EU: Actors, institutions and processes (3e). Routledge: London and New York, 267-286.

2012

Lovio, R,Kivimaa, P, 2012. Comparing alternative path creation frameworks in the context of emerging biofuel fields in the Netherlands, Sweden and Finland. European Planning Studies 20(5): 773-790. 

Mickwitz, P., 2012. The Road to Rio 20: An Opportunity Missed (?), Forum for Development Studies, 39 (1): 75-81.

2011

Journal of Cleaner Production Special Issue (three Enpath articles):

Mickwitz P, Hildén M, Seppälä J, Melanen M (2011). Sustainability through system transformation: lessons from Finnish efforts, Journal of Cleaner Production 19(6): 1779-1787.

Kivimaa P., Mickwitz P (2011). Public policy as a part of transforming energy systems: framing bioenergy in Finnish energy policy, Journal of Cleaner Production 19(6): 1812-1821.

Heiskanen E, Lovio R, Jalas M (2011). Path creation for sustainable consumption: Promoting alternative heating systems in Finland. Journal of Cleaner Production, 19(6): 1892-1900.

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Kivimaa P, Lovio R. (2011). Transformation and policy protection in energy regimes: Four cases of wood-based bioenergy, 4S Conference, Session on "Strategies of Transition towards Green, Post Carbon Societies II", 2-5 November 2011, Cleveland, Ohio.

Lovio, R., Mickwitz, P. & Heiskanen, E. (2011).”Path dependence, path creation and creative destruction in the evolution of energy systems”. in Wüstenhagen R. and R. Wuebker (eds.) The Handbook of Research on Energy Entrepreneurship, Edward Elgar, Cheltenham, p. 274-301.

Lovio R, Rinkinen J, Temmes A.(2011). Can biofuels and electric vehicles contribute to green growth in Finland? In R. Lovio. et al. (eds) Towards green growth? The position of Finland in environmental technology. Tekes Review 282/2011, p. 37-59.

Mickwitz P, Upham P (2011). The politics and policy dynamics of socio-technical systems transformation: cases from the EU, Finland and the UK, Invited paper for the Yale Workshop "Intervening to Constrain our Future Selves: Strategic Policy Interventions to address the ‘Super Wicked’ Problem of Climate Change", 5-6 May 2011, 37 p.

Rinkinen J (2011). The role of media discourse in path creation: The case of energy use of Finnish personal transport system. 2nd International Conference on Sustainability Transitions Diversity, plurality and change, 13-15, Lund, Sweden.

2010

Heiskanen, E. & Lovio, R. (2010). User-producer interaction in housing energy innovations: Energy innovations a communication challenge  Journal of Industrial Ecology 14(1) 91-102.

Kivimaa, P., Lovio, R., Mickwitz P. (2010). The role of system interlinkages for path dependence and path creation in energy systems. Presented at the conference Energy Transitions in an Interdependent World, 25 - 26 February 2010, University of Sussex, Brighton. 

Kivimaa, P., Lovio, R., Mickwitz P. (2010). The influence of system interlinkages on path dependence and path creation in energy systems (2nd version). Proceedings of the Workshop on New Path Creation,  5-7 September 2010, Oxford.

Rinkinen, J (2010). SY 21/2010 Liikenne mediassa. Kilpailevat tulevaisuudet sähköautosta autottomuuteen [The future of traffic in the media: Competing visions from electric cars to a car free future], Finnish Environment, 21/2010, Helsinki: The Finnish Environment Institute.

Rinkinen, J. (2010). Sähköautolla median rakentamalle valtatielle: Diskurssianalyysi median sähköautokeskustelusta [Driving electric cars on the highway built by the media: A discourse analysis of the media debate about electric cars]. Liikenne/Kaupunki 1/2010. s. 30-43.

2009

Heiskanen, E., Kivisaari, S., Lovio, R. & Mickwitz, P. (2009). Designed to travel? : Transition management encounters environmental and innovation policy histories in Finland. Policy Sciences  42(4): 409-427, DOI10.1007/s11077-009-9094-2.

Reudelhuber M. (2009).United States Climate Change Policy: Assessing avenues for greenhouse gas reductions under the Obama Administration. Reports of the Finnish Environment Institute 25/2009, Helsinki: Finnish Environment Institute 87 p.

Presentations by members of the EnPath-project

Go to the separate web-page:

Presentations by members of the EnPath-project

Meetings and Events Organised by EnPath

  Presentations:
  Rob Raven: Niche protection in transitions to sustainability (EnPath_2511_2010_Raven.pdf)
  Peter Lund: How fast could new energy technologies penetrate on the market? (EnPath_2511_2010_Lund.pdf)
  Jenny Rinkinen: The role of media discourse in path creation: The case of energy use of personal transport system in Finland (EnPath_2511_2010_Rinkinen.pdf)
  Paula Kivimaa: Public policy as a part of transforming energy systems - Framing bioenergy in Finnish energy policy from the 1970s to 2009 (EnPath_2511_2010_Kivimaa.pdf)
  • The 2nd EnPath seminar on Change and Stability in Energy Systems, 9.12.2011
  • The 3rd EnPath seminar on Change and Stability in Energy Systems, 11.-13.6.2012

Research Team

Finnish Environment Institute (SYKE):

Research Director, Professor Per Mickwitz
Senior Researcher Paula Kivimaa
Visiting Professor Paul Upham

Aalto University, School of Business (Department of Management and International Business):

Professor Raimo Lovio
Research Professor Eva Heiskanen
PhD Candidate Eeva-Lotta Apajalahti
Researcher Jenny Rinkinen

Advisory Group

The project has an advisory group that will give the project feedback and guidance during the work. The members of the group are leading international and national experts on diverse aspects of energy systems.

The members of the advisory group are:

  • Lena Neij, Professor, IIIEE, Lund University
  • Rob Raven, Assistant Professor, Eindhoven University of Technology
  • Rolf Wüstenhagen, Professor, University of St. Gallen
  • Magnus Cederlöf, Counsellor, Environmental Protection Department/Climate Change, Ministry of the Environment
  • Peter Lund, Professor, Aalto University School of Science and Technology
  • Jouko Kinnunen, Managing Director, Motiva Oy
  • Pentti Puhakka, Senior Engineer, Energy Department, Ministry of employment and the economy

Further Information

Further information can be obtained from Research Professor Per Mickwitz, Finnish Environment Institute, firstname.lastname@ymparisto.fi and other project members.

Published 2013-05-03 at 13:29, updated 2016-04-13 at 17:59

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