Scripting Transitions: A framework to analyze structural changes in socio-technical systems

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Scripting Transitions

A framework to analyze structural changes in socio-technical systems

Anish Patil

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Scripting Transitions

A framework to analyze structural changes in socio-technical systems

Proefschrift

ter verkrijging van de graad van doctor

aan de Technische Universiteit Delft,

op gezag van de Rector Magnificus prof. ir. K.C.A.M. Luyben,

voorzitter van het College voor Promoties,

in het openbaar te verdedigen op 6 juni 2014 om 15:00 uur

door

PATIL Anish Chandrakant

Master of Engineering, Vanderbilt University, USA

geboren te India.

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Dit proefschrift is goedgekeurd door de promotor(en): Prof dr. ir. P.M. Herder

Prof dr. ir. M.P.C. Weijnen

Copromotor: Dr. P.W.G. Bots

Samenstelling promotiecommissie:

Rector Magnificus, voorzitter

Prof. dr. ir. P.M. Herder, Technische Universiteit Delft, promotor Prof. dr. ir. M.P.C. Weijnen, Technische Universiteit Delft, promotor Dr. P.W.G. Bots, Technische Universiteit Delft, copromotor Prof. Dr. rer. nat. C. Binder, University of Munich

Prof. Dr. K. Brown, Curtin University

Prof. dr. C.P van Beers, Technische Universiteit Delft Prof. dr. R.W. Kunneke, Technische Universiteit Delft

Prof. dr. ir. W.A.H. Thissen, Technische Universiteit Delft, reservelid

ISBN 978-90-79787-59-3

This research was funded by the Next Generations Infrastructures Foundation. This thesis is number 70 in the NGInfra PhD Thesis Series on Infrastructures. An overview of titles in this series is included at the end of this book.

Publisher: Next Generations Infrastructures Foundation P.O.Box 5015, 2600 GA Delft, the Netherlands www.nginfra.nl

Keywords: TranScript, transitions, sustainable energy system, socio-technical systems

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Given the amount of time I have spent on this thesis, it would not be an exaggeration to call it a transition. During this transition, many changes have taken place in my life – I got married, with two beautiful daughters, an interesting job, and travelled to more than 50 different countries. This transition took time, but I thoroughly enjoyed it. Best parts of this transition were these ‘detours’. It is like going on a vacation where everything is planned out but one day you make a wrong turn or take a detour, and end up somewhere completely new and different, doing something you never thought you’d do. Maybe you feel a little nervous while it's happening. However, looking back, you realize it was the best part of the whole trip. Looking back on my PhD phase, this is how I feel today. These detours made this phase memorable for me. Maybe I am just romanticizing this a tad, as memories are short-lived, and I may have forgotten some tough moments during this time. My wife used to tease me, saying that I will retire doing a PhD, but for once I proved her wrong. Married men will identify with me on this one.

Whatever it is, at this moment while writing this final piece related to my thesis, I feel happy the way this transition has panned out for me. Of course there were a few ups and downs, but given a chance to do it again I may not do anything drastically different. I have seen many PhD’s talk about life after PhD, but surely I had a life before and during my PhD, and things won’t be terribly different even after. During this transition, I met many nice people, and I would like to take this opportunity to thank all these people who have helped me successfully reach my intended destination.

First of all, I would like to thank my promotors Paulien Herder and Margot Weijnen. Margot, thanks for giving me the opportunity to pursue a PhD at Delft. I still remember our brief phone conversation when you hired me as a PhD researcher and everything was arranged quickly after for me to start my work here. You watched this transition from a distance and always gave me confidence that I would finish it successfully. Paulien, thanks for always being there for me during this transition. You have seen me go through many highs and lows during this phase, but you always trusted me (or if you may have not, you never showed it). This trust gave me the strength to finish this thesis.

Many thanks also go to my co-promotor, Pieter Bots. However, knowing Pieter, I should keep this acknowledgement short, crisp and clear; anything else and it will be superfluous. Pieter, thanks for helping me with the scientific rigor, especially in ‘structuring’ my thoughts so I could bring this PhD ‘process’ to a successful end. Without your help this thesis would not have been completed.

I would also like to thank Kas Hemmes and the late Barry Lichter for bringing me in contact with Margot, and helping me in getting this PhD position. Thanks also to Hans Vrijenhoef, for reducing my contract at Proton last year, so I could concentrate on getting this thesis done. Furthermore, I would like to acknowledge the Greening of Gas project and the Next Generations Infrastructure program for sponsoring my research.

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Special thanks go to Rob Stikkelman. He is truly the bridge between industry and academics at the E&I section. During my PhD phase he brought me in touch with Proton Ventures, where I have been working for the past four years. And later while working at Proton, we teamed up to work on a TUDelft/NGI project. Over these years I have seen him help many PhD’s, of course in his own special way. It’s been great working with him.

I appreciate the help the E&I secretariat has provided me over these years, especially Eveline, Prisca, Connie, Angelique and Rachel. I would further like to thank my peer group at TBM - Buyung, Geertje, Igor and Telli for their constructive feedback over the years.

During this phase I have travelled to many different countries. Some of these trips were for academic conferences with other E&I section members, with many great and interesting moments. Special mention to the family portraits (with a self-timer of course) in Taiwan and New Zealand with Laurens and Hamilcar; Samba dancing in Rio with them and Catherine; missing our flight in Berlin on our way back with Austin and having to take an overnight train in freezing cold; the ‘brave teacher’ – Laurens, sticking his head out of the toy train while coming down from the Alishan mountains; crashing a Rotary club party in Taipei with Hamilcar and actually receiving a big china set as a gift! Given its international mix, section E&I was always fun to be a part of, especially because of the ‘axis’ – Leslie, Monica and Austin, who were not just colleagues but over time became great friends, too. I am glad that Leslie and Austin have agreed to be my paranymphs for the defense.

Special thanks to my neighbors – Jan, Marianne, Jo and Kees. They have always treated me like family, and made me feel welcome in their homes. This special bond with my neighbors and my ex-roommates from Zusterlaan – George, Pawel and Pantelis, made Delft ‘home away from home’ for all these years. I would also like to thank our friends in Delft – Rakhi, Zeeshan, Elis, Koen, André and Fanni for many interesting social gatherings and good times.

Over these years my squash and tennis group have become really good friends to me, especially Robbert, Jeroen, Andreas, Ben and Luca. Ben, I have always enjoyed our squash games, our yearly 40 km ‘Midvastenlopen’ and sauna discussions. You have always inspired me with your open-mindedness and positive outlook. Andreas and Luca, we were in the same boat for a long time, and I truly appreciate our discussions about the thesis, travels, sports and other good and better things in life. Andeas, thanks for your help with the cover design for this book and the Dutch translations. This group has just not helped me in my personal life, but also played a large role in my academic life. There have been moments when I was 0-8 down in squash and I have come back to win the game, similarly in tennis too. It was not just about winning the game, but much more than that. I told myself, if I can still win a game from being 0-8 down then I can certainly finish my PhD thesis one day too. Especially, I remember the Midvastenlopen four years ago. I was walking with Ben, Andreas and Zsofi. Around 18 km mark one of my knees completely gave up on me. I could have easily given up at that point, but I told myself if I give up on the remaining 22 kms, one day I might just easily give up on my thesis as well. At that point, I made up my mind that I am going to finish the race and also my thesis one day. I completed the remaining 22 kms with the help of a stick and physical and

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I am indebted to my parents for all their love and support. My father, with his around the world travels and my mother, with her desire to try new things have always been an inspiration to me. I would also like to mention my late uncle Ramesh Patil. I owe a lot of ‘firsts’ in my life to him. As a kid I still remember the day he got me my first watch and a belt – my first train ride, amusement park trip, and even my moped was because of him. He played a major role during the formatting period of my life. Special thanks go to my brothers – Mahesh, without his guidance I would still be a wimpy guy who would have quit things even before they got tough and Ashish, who has been a great traveling companion and a friend all these years. Ashish, I have always enjoyed our trips and discussions, and sometimes it is a bit unsettling to see how alike we are, in the way we look, think and act.

My wife, Zsofia, deserves a special acknowledgement – I dedicate this book to her. I know for sure, without Zsofi’s support I would not have been able to complete that Midvastenlopen four years ago and also not this PhD thesis. She has always been by my side during this transition, and supported me whenever I needed her. She ensured that that the ‘home department’ was running like a well-oiled machine and I could just focus on my work. This stability in one important aspect of my life, gave me the courage and stamina to complete this thesis. Now that this thesis is completed, I am looking forward to spending more time with her and our beautiful daughters – Johannah and Annabel.

Cheers to a successful transition! Anish Patil – April 2014.

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PREFACE AND ACKNOWLEDGEMENTS ………...……… vii

CHAPTER 1: INTRODUCTION ... 1

INTRODUCTION ... 1

SUSTAINABLE DEVELOPMENT ... 2

ENERGY INFRASTRUCTURE SYSTEM ... 3

TRANSITION TOWARDS SUSTAINABLE ENERGY SYSTEM ... 4

LITERATURE GAP ... 6

RESEARCH QUESTION ... 6

RESEARCH APPROACH ... 7

CHAPTER 2: TRANSITIONS IN SOCIO-TECHNICAL SYSTEMS ... 11

TRANSITION ... 11

MULTI-STAGE DYNAMICS ... 12

MULTI-LEVEL DYNAMICS ... 13

SOCIO – TECHNICAL SYSTEMS ... 15

DELINEATING RULES ... 17

STRUCTURE – ACTOR DUALITY ... 19

STRUCTURE AND PROCESS... 21

DISCUSSION ... 23

CHAPTER 3: ANALYTICAL FRAMEWORK - TRANSCRIPT ... 25

CONCEPTUALIZING TRANSITIONS ... 30

RESEARCH METHODOLOGY ... 32

TESTING OUR FRAMEWORK ... 37

CHAPTER 4: GREENING OF GAS CASE STUDY ... 39

NECESSARY CONDITION 1: NEED FOR EXCESS HYDROGEN CAPACITY. ... 42

NECESSARY CONDITION 2: NEED TO BE ABLE TO FEED HYDROGEN INTO THE NATURAL GAS NETWORK AND TO HAVE END-USER APPLIANCES THAT ARE COMPATIBLE WITH THE HYDROGEN AND NATURAL GAS MIXTURE. ... 56

RESULTS ... 70

AND/ORDIAGRAMS PRESENTING ALL THE ASSETS ... 71

SYSTEM CONFIGURATION ALONG WITH THE RELEVANT STRUCTURES... 73

CHAPTER 5: HYDROGEN FOR PUBLIC TRANSPORT CASE STUDY ... 81

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NECESSARY CONDITION 2: NEED TO HAVE EASY ACCESSIBILITY OF HYDROGEN FOR REFUELING THE PUBLIC TRANSPORT

BUSES. ... 90

NECESSARY CONDITION 3: NEED TO HAVE HYDROGEN READY BUSES... 92

RESULTS ... 101

AND/OR DIAGRAMS PRESENTING ALL THE ASSETS ...101

SYSTEM CONFIGURATION ALONG WITH RELEVANT STRUCTURES ...103

CHAPTER 6: DISTRICT HEATING SYSTEM CASE STUDY ... 107

NECESSARY CONDITION 1: NEED TO BE ABLE TO CAPTURE WASTE HEAT. ... 109

NECESSARY CONDITION 2: NEED TO BE ABLE TO TRANSPORT AND USE WASTE HEAT FOR DISTRICT HEATING. ... 115

RESULTS ... 120

AND/OR DIAGRAMS PRESENTING ALL THE ASSETS ...121

SYSTEM CONFIGURATION ALONG WITH RELEVANT STRUCTURES ...122

CHAPTER 7: DISCUSSION AND CONCLUSIONS ... 125

CONTRIBUTION TO THE TRANSITION MANAGEMENT BODY OF LITERATURE ...126

ADDED VALUE OF THE TRANSCRIPT FRAMEWORK ...132

CONTRIBUTION TO THE SYSTEM DYNAMICS BODY OF LITERATURE ...135

CONTRIBUTION TO THE TECHNOLOGY INNOVATION SYSTEMS BODY OF LITERATURE ...137

CONCLUSIONS ... 140

VALIDATING OUR ANALYTICAL FRAMEWORK ...141

REFLECTION ON THE RESEARCH PROCESS ... 144

FUTURE OUTLOOK FOR OUR FRAMEWORK ... 146

CHAPTER 8: REFLECTION... 151

BIBLIOGRAPHY ... 157

INDEX ... 181

SUMMARY ... 183

SAMENVATTING ... 193

ABOUT THE AUTHOR ... 203

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Chapter 1: Introduction

Introduction

Energy plays a crucial role in the sustainable development of society – clean, affordable, and continuous supply of energy is the engine for future growth (UNESCAP 2006). Energy is fundamental to the quality of our life. From the alarm that wakes us up in the morning, the coffee-machine that makes coffee to keep us alert, the automobile that drives us to work, to the kitchen stove that cooks our food – energy is part of our life. The constant dependence on fossil fuels to energize our life presents a new dilemma – how to satisfy this constantly growing demand for energy given the fact that the fossil fuel resources are finite? The challenge is not just satisfying the increasing energy demand, but at the same time doing it in an environmentally friendly way.

Much of the global-scale environmental degradation we see today is due to the adverse effects of energy production and usage (EIA 2008, Watson 2008). When coal, gas and oil are burnt, they release carbon dioxide (CO2), which is a contributor to the greenhouse effect by trapping heat in the

atmosphere and causing global warming (Kaygusuz 2009). Economies of countries, and particularly of the developed countries, are dependent on secure supplies of energy. As large developing economies, such as India and China develop further, the demand for energy will significantly increase in the near future, thus putting strain on the global balance between energy supply and demand. The World Energy Council (2007) predicts that by the year 2050, the world-wide energy demand will at least double compared to its present level, and that if the energy supply does not match the demand, energy prices will rise drastically (WEC 2007). It is a given fact that fossil fuel resources are finite – hence, constantly increasing energy demands are unsustainable (Tsoskounoglou, Ayerides et al. 2008). A majority of the global oil and gas resources are concentrated in the Middle-East, and keeping in mind that this area is for the most part subject to constant international political tension, it is not surprising that direct dependence on fossil fuels constitutes a risk factor for the political and economic stability of the whole world (Clingendael 2004).

Currently fossil fuels cater to about 80% of the world’s primary energy demand, and the remainder of 20% demand is catered by alternative energy resources such as nuclear and renewables (IEA 2010). Renewables refers to form of energy which is an alternative to the traditional fossil fuels and nuclear (EPAct 2005). Although renewables currently play a very minor role in satisfying the primary energy demand, they can be expected to play a larger role in an energy system of the future given their potential, as clean and safe energy resources. Benefits include diversification of energy supply, enhanced regional and rural development opportunities, creation of a domestic industry and employment opportunities (del Río and Burguillo 2009). As most of the renewables are distributed more evenly over the globe than world oil resources for example, the exploitation of these resources may also increase the security of supply (Junginger 2005). There is such a diversity of choices that the exploitation of renewables if carried out in the context of

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Chapter 1: Introduction

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sustainable development could provide a far cleaner energy system while at the same time conserving scarce fossil fuel resources. The current energy system based on fossil fuels is not sustainable for the future, and the main task facing mankind will be to manage the transition process towards a sustainable energy system.

Sustainable development

Sustainable development implies meeting the needs of the present without compromising the ability of future generations to meet their own needs (UN 1987). In seeking sustainable development, it becomes apparent that concern for the environment is part of a wider concern aimed at well-being and improved global living standards. Sustainable development of a society demands a sustainable supply of energy resources – that in the long term, is readily available at an affordable cost and can be utilized for all required tasks without causing negative societal and environmental impacts (Dincer 2000, MINVROM 2001).

Based on the above definition, the current global trend in energy supply and consumption is not sustainable, and it is responsible for the lion’s share of greenhouse gas emissions. The established fossil energy sources are finite and at the rate at which they are being depleted they will not sustain future generations (Ohta and Veziroglu 2002, IEA 2010). Politicians worldwide have agreed on ambitious CO2 emission reduction targets. The most notable of such international agreements are

the Rio Conference (Earth Summit) and the Kyoto Protocol to the United Nations Framework Convention on Climate Change that strengthens the international response to climate change (UNFCCC 1997). At the Earth Summit in 1992, more than 150 governments, including the major industrial and developing countries, agreed on a framework convention on climate change. The main idea of the convention was to establish a framework for dealing with climate change policies (Lund 2006). During the 1990s it soon became clear that this Rio convention in itself would not change developments towards growing emissions of greenhouse gases. In 1997 the convention was therefore expanded to include the so-called Kyoto Protocol, which for the first time sets binding targets for industrialized countries to reduce emissions by 2020. By arresting and reversing the upward trend in greenhouse gas emissions that started in these countries 150 years ago, the Kyoto Protocol promises to move the international community one step closer to achieving the Convention’s ultimate objective of preventing "dangerous anthropogenic (man-made) interference with the climate system" (UNFCCC 1997). The European Union (EU) and its Member States ratified the Kyoto Protocol in late May 2002 (EC 2002). In line with this agreement many international, national and city governments have formulated strategies to meet the Kyoto objectives. The EU target is 20% reduction of emissions by 2020, when compared to 1990 (EC 2002). In line with the EU targets, the Netherlands have agreed for 14% reduction of emissions in 2020 when compared to 1990 levels (EZ 2011). The Protocol suggests various means of attaining the objectives of lowering emissions, for example improving the energy efficiency, promotion of sustainable forms of agriculture, development of renewable energy sources, etc (EC 2002). So on the one hand the protocol aims at reducing harmful emissions and on the other hand at improving the security of supply due to improvements in energy efficiency and enhanced diffusion of renewables.

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P a g e | 3 Energy Infrastructure System

Energy infrastructures are responsible for the delivery of most of energy. Infrastructures are defined as basic social and technical structures needed for the operation of a society (Oxford 2013). They provide essential services such as transport (of people and goods), water, energy, waste-removal, and communication services (Herder and Verwater-Lukszo 2006, Weijnen and Bouwmans 2006). Here (im)movable technical structures deliver essential public or private services through the storage, conversion and/or transportation of certain commodities (Herder, Turk et al. 2000).

As infrastructures encompass both social and technical structures, they form a so-called socio-technical system (STS) (Hughes 1987, Weijnen and Bosgra 1998, Ottens, Franssen et al. 2006, Herder, Bouwmans et al. 2008). The concept of infrastructures as STS was introduced by Thomas Hughes in his analysis of the development of the electricity infrastructure (Hughes 1987), wherein he asserts that infrastructures should be treated as STS – here social structures include institutions such as regulations, norms, heuristics, etc; and the technical structures include assets such as machinery, pipes, buildings etc (Peter Kroes 2006, Fleetwood 2008). These structures facilitate processes such as production of energy, flow of energy, regulation of the system, etc within an energy infrastructure. The existing energy infrastructure has evolved over time, resulting into a complex socio-technical system built up around the energy supply chain (Larsen and Petersen 2005). Once the investment in assets is made, the economic return period is often very long (decades to centuries), and the major decisions on new infrastructure are likely to bind actors to this structure for a long time (Nielsen and Elle 2000, Watson, Scrase et al. 2010). Hence, energy infrastructures are characterized by path dependency, thus implying that the decisions taken in the past limit the options available today and in the future (Foxon, Pearson et al. 2013).

STS acquire momentum as they grow (Hughes 1987). Momentum can be defined as a mass of technical and institutional structures [that tend] to maintain their steady growth and direction. This implies that once the technical and institutional structures have emerged, the system tends to continue along that same path of growth. The momentum of the system thus pulls it forward along what appears to be a predetermined pathway; this phenomenon is called path dependency that leads to lock-in (Nelson and Winter 1977, Kaijser 2004).

Path dependency implies that the technical choices available today are often dictated by historical developments (David 1985, Page 2006). Path dependency makes it difficult to deviate from paths that are rooted within existing systems. Positive feedback mechanisms like bandwagon and network effects are at the origin of path-dependence (Kelly 1998, Dobusch and Schüßler 2012). Bandwagon effect explains the tendency that as a greater number of actors adopt a technology, the more other potential adopters will adopt it (Farrell and Saloner 1986, Lee, Smith et al. 2003). Initial adoption serves as evidence that the early adopters must have superior information about the technology (Davies 1979, Banerjee 1992). Bandwagons create a self-reinforcing cycle because the bigger the bandwagon gets, the larger the number of actors involved in the bandwagon (Abrahamson and Rosenkopf 1993). Positive network effects lead to economies of scale when the higher number of technology users allow for a more efficient production and distribution of the

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technology. These savings may be forwarded to the consumers – via lower prices – which increases the attractiveness of the technology even further (Sydow, Schreyögg et al. 2005). The more a technology is used by other users, the larger the availability and usefulness of that technology and the variety of supporting physical, social and institutional structures (such as technologies, people, relationships, standards, etc.) that become available and are adapted to that particular technology. Development of supporting structures leads to the formation of a path around the selected technology that locks-in and persists against change (Arthur 1989, Page 2006). For example – as technology matures overtime, more and more people start using the technology, this leads to formation of standards or regulations, this further fuels the production and usage of this particular technology.

Furthermore, energy infrastructure requires large upfront investments, where the high set-up costs are clear barriers to entry for new actors, or barriers for actors within the system to change (Arthur 1996, Watson, Scrase et al. 2010). As there may be sunk costs in the existing assets, shifting to a new technological path would destroy these sunk costs; hence actors tend to stick to established technologies as long as possible, thus eventually leading to a “lock-in” (David 1985, Geels 2004).

Transition towards sustainable energy system

Changing the energy infrastructure system towards sustainability implies a transition (Bergh and Oosterhuis 2005, Verbong and Geels 2007). Our working definition for transition is that a transition is a process through which one or more new significantly different structures are established. Transition is not caused by change in a single factor – such as introducing a new technology, but is the result of multiple processes over time between the various structures of an STS leading to the emergence of a new structure (Kemp, Schot et al. 1998, Rotmans and Loorbach 2009). Over time innovation processes bring about changes to an existing structure or establishment of a new structure; while at the same time this new structure and other existing structures facilitate these processes. This shows the duality of structures and processes which both define, influence and constrain each other (Bots and Daalen 2012).

During the transition towards a sustainable energy system renewables are expected to play a larger role, but there are still quite a few barriers to be overcome (Elliott 2000, Foxon and Pearson 2007). One of the main problems with renewables is intermittency – that can be the difference between day and night, or seasonal, summer and winter. How do we capture solar power and store it for a rainy day, literally. On the other hand fluctuations in wind power would lead to grid imbalances if not properly controlled. Although solar and wind power (most-feasible renewables currently) are more or less proven technologies, the supporting infrastructure that would overcome the intermittency of these resources to provide uninterrupted energy is still largely unproven, hence they are still costly or not that widely available (Foxon, Gross et al. 2005). This problem is faced by any new technology – wherein the production of applications awaits complementary infrastructure, and infrastructure investments await applications. It’s a classic chicken and egg

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problem, where investors hesitate in investing in such emerging technologies (McKay 1992, Meijer, Hekkert et al. 2007).

Competing head-on with the incumbent energy system based on fossil fuels is exceptionally difficult. A century of investment and innovation has yielded a comprehensive network of production, distribution and usage of energy carriers that powers our homes, cars and factories more conveniently, efficiently and cost-effectively than any other option available at this point. But as observed around us, we see that changes do happen and new technologies do manage to overcome the chicken and egg problem. Opportunities lie in niches. A niche is a protected environment that allows developing the initial bandwagon effect, during which early adopters test the technology and it can be introduced to a larger audience for further diffusion (Raven 2005, Caniels and Romijn 2008). Renewables can become successful if they get the opportunity to develop and improve in a niche. The initial bandwagon effect allows new technologies to overcome the reinforcing mechanisms of path dependence and lock-in (Schot and Geels 2008).

Transition towards a sustainable energy infrastructure is characterized as being a complex multi-actor problem (Loorbach, Brugge et al. 2008, Patil, Ajah et al. 2009). The complexity exists due to the interactions between the various structures within an STS (Weijnen, Herder et al. 2008). An STS is more than just an aggregation of its technical and institutional structures. Typically, as large sets of structures are working together to facilitate processes, synergies emerge. For instance, wind mills are installed to produce electricity, but when combined with “power to ammonia” technology, this electricity can be stored in the form of ammonia. Ammonia could be further used as a fuel, fertilizer or an industrial feedstock (Patil 2012, Patil, Laumans et al. 2013). This example shows that the combination of two technologies, such as wind mills and power to ammonia, can create synergies that can potentially bridge different STS’s. System structures continually interact in unpredictable ways through the processes they facilitate, and if one structure is added, altered or removed from the system, the other structures in the system will adapt the processes they facilitate accordingly (Holland 1992). Continuing our above example, if during wind-less periods wind electricity is not available, then natural Gas or biomass could be used to produce ammonia. Hence, if one structure such as wind mills do not perform other alternatives such as natural gas or biomass could be used to facilitate the ammonia producing process (Patil 2012).

The presence of multiple actors with different interests makes it difficult to shape the transition, as different actors attempt to steer changes into their own desired direction (Rotmans, Kemp et al. 2001, Patil, Ajah et al. 2009). It is not always clear where and how the change process should start and which actors should take the lead, if any (Loorbach, Brugge et al. 2008). We observe that the wide adoption of renewables has not yet taken place and that policy makers are in need of tools to nudge the system, to bring about the required changes. However there is even a greater problem as the policy makers do not know exactly which initial steps to take, let alone how to shape the system development trajectory in the direction of sustainability. To achieve sustainable development there is a need to translate global initiatives such as Kyoto targets into locally implementable policies, which can give impetus for the diffusion of renewables (Gupta and van Asselt 2006). Currently, there is difficulty operationalizing these global initiatives into implementable policies, this is proven

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by the fact that many countries who have agreed to Kyoto targets are having difficulties meeting these greenhouse gas reduction goals (Torello 2013). For example: the proportion of energy from renewables in the Dutch energy mix is lagging behind the policy goals and it is highly unlikely that the Kyoto 2020 targets will be met (Nagappan 2008, Verdonk and Wetzels 2012).

Literature gap

We see a gap in the literature, especially a framework or tool that creates or produces a roadmap for transition. A study that maps out structural changes during transition in STS at intermediate stages is missing. We hypothesize that systematic analysis of the structures and processes within an STS will give us an insight into the transition process. If we could garner insight into this, we would know which actors control or are influenced by such structures, and which incentives or disincentives would mobilize such actors to nudge the transition towards a sustainable energy system. Such an actor-centered approach will help us in identifying policy levers by giving a clear idea to policy makers how to cater to the intrinsic drivers of different actors in order to nudge the transition of STS towards a desired end-state. Hence, the aim of this research is to create a framework that improves the understanding of transitions. Such insight is vital for policy analysts while devising policies in order to shape the development of the energy system in the direction of a sustainable energy system.

Research question

The problem as viewed in this research is that we do not know the exact steps to take in order to bring about the desired transition towards a sustainable energy system. We would, if we had a better understanding of transition phenomena within an STS. A better understanding of transition requires an analytical framework that will allow us to understand how transitions take place in STS, which is our research objective.

The research question we would like to address is:

What analytical framework will allow us to understand how transitions take place in an STS, especially how technical and institutional structures co-develop?

This framework helps us to understand transitions, if it can help us answer the following questions.

1. What are the potential transition paths towards a sustainable energy system? Here transition path is a sequence of structural changes during a transition.

2. Given a transition path, what are the structures that need to be established, which are the actors who would have an interest in developing these structures, and what are the drivers for these actors?

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P a g e | 7 Research approach

The main deliverable of this research is an analytical framework that will yield insights into transitions in socio-technical systems. We conceptualize transition as changes in structures, and socio-technical systems as systems where both the technical and social structures are relevant. For this research we have followed the deductive reasoning approach, where we have a hunch that thinking in terms of structures and process duality might help us in understanding transitions. We start with the Transition Management approach along with the structure and process duality to distil a framework, and further apply and test it on three different cases to see whether it works.

Since 2001, the Dutch government has adopted the so-called transition management approach as a basis for energy policy-making in the Netherlands (MINVROM 2001). We see shortcomings in using the Transition Management approach in garnering insight into the transitions in STS, especially in getting insights at the actor and structure level. We hypothesize that the Transition Management approach restricts itself to system level dynamics of the STS and does not reveal detailed structural changes happening during the transition process (Rogers, Neil et al. 2001, Rotmans, Kemp et al. 2001, Rotmans and Kemp 2003). Hence we look at the structuration theory that gives insight into the interplay between human action and social structures (Giddens 1984). Structuration theory is a proven framework to garner interplay between actors and social structures but it misses the handle for analysing technical structures (Orlikowski 2000). To balance the influence of technical and social structures on the development of the STS during the transition, we look at the philosophy of technical systems literature, to gain insights into the role played by technology during the transition in STS (Kroes and Meijers 2006, Peter Kroes 2006). This helps us in conceptualizing our analytical framework – that structures constrain and enable actors’ actions (processes), while at the same time processes produce, maintain and modify structures. We further develop a clear syntax to use our framework, and a method to apply our framework to different cases.

The research process we went about in achieving our research objective is presented in figure 1.1.

Step 1 for this research is about problem formulation. In this chapter we have established the need for an analytical framework that would impart insights into the transition process in socio-technical systems. Additionally, we present the research objective and question for this thesis. The aim of this step is to focus our research in a particular direction, and in this case it is transition in socio-technical systems.

Step 2 for this research is about problem justification, where in chapter 2 we discuss the state-of-the-art and analyze the dominant views to study transitions in socio-technical systems. The aim of this chapter is to identify the gaps in the literature and justify if a problem as specified in step 1 does indeed exist. Additionally, we discuss how our new proposed framework will fill these gaps and add value to the study of transitions in socio-technical systems.

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Step 3 of this research is about proposing a solution to fill in the gaps as identified by us in the field of transitions in socio-technical systems. In chapter 3 we will present our analytical framework with a methodology to apply this framework and interpret the results. The aim of this chapter is to provide a clear syntax and methodology to the analyst to apply our framework and provide a fairly unambiguous way of interpreting the results obtained.

Step 4 of this research is about testing our analytical framework along with the proposed methodology on three different cases. Chapter 4, 5 and 6 presents the analysis of three cases, along with a response to the research question posed above, and discuss whether our analytical framework allows us to garner insight into the transition process.

Step 5 of this research is about discussion and conclusion. In this chapter we discuss whether and how our framework adds value to the currently available methods to study transition. Furthermore, we will conclude whether we have answered our research question, especially focusing on validating our analytical framework. Such validation will be done along these three basic criteria:

- Conceptual soundness: As a tool (formal language) is it clear and transparent to use?

Conceptual validity means that the theories and assumptions underlying the conceptual model are correct, or at least justifiable, and that the model representation of the system, is reasonable for the model’s intended use (Watson, Scrase et al. 2010). We contend that the framework is internally consistent if there is a single, relatively unambiguous way of interpreting the diagrams (Rykiel Jr 1996, Barreteau, Bots et al. 2010). Hence we must specify clear rules in order to help the analyst map real world systems. This will be done in chapter 3, where we define attributes to each element of the analytical framework, such as what an actor is, what a rule is and what a process is. The aim is to produce representations that are systematic and readable.

- Usability: Does the application of our framework produce meaningful insights?

When is our framework usable – when it can articulate and bring to fore the essential elements of a case study. An analytical framework frames our focus and our way of thinking. Usability determines whether our framework has helped us in answering our research question, and whether it does what it is meant to do (EC 2010).

- Completeness: is our framework complete?

Our framework is complete when it is neither superfluous nor incomplete, while at the same time allowing us to answer our research question it is intended to (Rykiel Jr 1996).

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Step 6 of our research is about brief reflection. This will be done in chapter 8, where we will provide general recommendations to scientists and policy makers.

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Chapter 2: Transitions in Socio-Technical Systems

Transition

Energy infrastructures are capital intensive with long lifecycles (Hughes 1987); hence incumbents seem to have vested interests, where each incumbent tries to maximize its own profits rather than collective gains. In this way, they perpetuate the existing system development path without any fundamental changes (Nielsen and Elle 2000). Even if there is a mutual understanding of the need to achieve transition towards sustainability at global levels, it remains to be seen how and where the transition process should start and progress. Enabling transition within a socio-technical system is deeply complex because of the range and variety of actors involved, each with their own agenda and perspective about the system, making coordination difficult (Rotmans and Loorbach 2009, Loorbach 2010).

In established socio-technical systems (STS), path dependency guides the direction of system development – history shapes the future, thus representing a barrier for new technologies (Liebowitz and Margolis 1995, Mahoney 2000, Unruh 2000). New technologies cannot easily compete with incumbent technologies, as they have yet to benefit from the reinforcing mechanisms of path-dependency and lock-in (Arthur 1989, Schot and Geels 2008). Against these mechanisms that favor incumbent technologies and products, new technologies are assumed to be adopted if they get the opportunity to develop and improve in a niche (Kemp 1994, Geels 2002, Rotmans and Loorbach 2008). Niches can potentially allow new technologies to escape lock in, by helping the technology to overcome initial barriers of high costs; the non-availability of complementary technologies; institutional rigidities; and the nonalignment of a new technology to the external environment during the infancy period (Mulder, Reschke et al. 1999, Schot and Geels 2008). Developing in niches enables a new technology to find early adopters and create the much needed initial bandwagon effect to help it diffuse (Raven 2005, Caniels and Romijn 2008).

The logic for creating a space for niches follows from the emergent characteristics of a system, which means that a small initial change in the system may have a great impact on the system in the long run (Holland 1992, Rotmans and Loorbach 2009). This transformation of a niche technology to a full-blown STS is a transition. Transition can be understood as the processes of structural change in major societal subsystems – they involve a shift in the dominant structures, a transformation of established technologies and societal practices, and movement from one state of relative stability to another state of relative stability (Newman 1996, Rotmans and Loorbach 2009).

Current literature claims that transition at an aggregated system level can be explained by a multi-stage and multi-level process (Geels 2001, Rotmans, Kemp et al. 2001, Geels 2002, Rotmans and Kemp 2003). A multi-stage process explains the progression of system change over time, and

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Chapter 2: Transitions in STS

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multi-level process captures the complexity of the interaction of a niche with the incumbent system and the subsequent emergence of a new system configuration.

Multi-stage dynamics

Multi-stage transition dynamics can be explained as system transformation from a state of relative stability (during the pre-formation stage) to quick development and instability (during the path formation stage), reverting to relative stability at the final path dependence stage (Hughes 1987, Rotmans and Kemp 2003, Kaijser 2004). The final stabilization phase of relative stability is a dynamic equilibrium state, characterized by the establishment of a new status quo (Parto 2007). The multi-stages (as captured in figure 2.1) at conceptual level are described in terms of three stages:

1. The pre-formation stage of relative stability where the status quo does not visibly change but in which the seeds for change germinate. This stage characterizes the presence of many niches (seeds for change), each vying to succeed (Rotmans and Loorbach 2009). Each niche is vying for the initial bandwagon support to succeed, and once the initial bandwagon is garnered the niche moves to the second stage of path formation. The Bandwagon effect implies that if a set of users adopts one technology, then that same choice thereby becomes more attractive to other users (Farrell and Saloner 1986).

2. The path formation stage where the process of change gets underway because some niches break out challenging the status quo and finding wider application and support by garnering the required bandwagon support from stage 1. During this stage the original niche garners momentum, and there are collective learning processes, diffusion and embedding processes (Caniels and Romijn 2008, Schot and Geels 2008). Visible structural changes are taking place throughout the system where new structures emerge and old structures become obsolete (Loorbach 2007).

3. The final path dependence stage is the stabilization stage where the speed of the structural change decreases and a new state of relative stability is reached. This stage is characterized by the establishment of a new status quo based on the newly successful niche (Rotmans, Kemp et al. 2001). This entails the formation of new structures, which impart stability to the STS. This stage is characterized by techno-institutional lock-in, wherein technical and institutional structures restrict changes in each other (Liebowitz and Margolis 1995, Parto 2003).

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Figure 2.1: Multi-stage transition process, showing changes in STS as a function of time (adapted from (Rotmans, Kemp et al. 2001))

Multi-level dynamics

Multi-level dynamics in transitions in STS can be conceptualized as the interplay between three levels – technological niches (micro), socio-technical regime (meso) and landscape developments (macro) (Rip and Kemp 1998, Geels 2002). Herewith the transition processes can be explained by the interplay of landscape developments (as shown putting pressure on the socio-technical regimes) combined with the emergence of innovations at the niche level. Niches that are successful in diffusing eventually do manage to destabilize the existing socio-technical structures and form a new one. A niche is a nascent socio-technical system with a structure that is dissimilar to that of the existing system. Here, nascent implies that all the social and technical structures relevant for the proper functioning of an STS are not yet established.

A multi-level perspective, captured in figure 2.2, characterizes pressures from both the landscape level and the niche level for the socio-technical regime to change. The socio-technical regime accounts for the stability of an STS through the coordinated and aligned activities of all the actors that are part of the system. Where a technological regime is the overall complex of scientific knowledge, engineering practices, production process technologies, product characteristics, skills and procedures, institutions and infrastructure which make up the totality of a technology (Smith 2000).

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P a g e | 14 Figure 2.2: Multi-level perspective (source: (Geels 2002))

The Transition Management perspective for studying transitions conceptualizes regimes as intermediaries between, on the one hand, specific innovations as they are conceived, developed and introduced – by specific people, teams, or firms; and on the other hand, broader social configurations that are known as landscape development (Rip and Kemp 1998, Geels 2002). Landscape developments consist of conditions – geopolitical circumstances, physical infrastructures, social norms and preferences, macroeconomic parameters, and demographic trends (Franssen 2003). Furthermore, the multi-level perspective does acknowledge the fact that changes at different levels occur at different time scales – niche level changes are more immediate in nature and individual actors can influence these changes. The regime level is characterized by stability; hence individual actors can influence the regime only very limitedly and indirectly, and change at this level occurs over longer periods, in the order of years or decades. Landscape developments occur over an even longer period of time, sometimes even centuries, and individual actors have no influence over these developments.

Within the Dutch Energy System, for example, a niche level can be understood as the combined heat and power (CHP) niche, wherein a single fuel source such as natural gas is used for generating electric power and useful thermal energy for heating or cooling. The regime can be understood as the incumbent electric power system and landscape developments can be understood as global warming. In the Netherlands, the potential market for micro-CHP (henceforth just referred to as CHP) is high, as it can probably take advantage of the extensive gas infrastructure connecting almost 97% of the households (Zachariah-Wolff, Egyedi et al. 2007) and secondly due to the relatively cool climate where heating is required for most of the year (Meijer, Hekkert et al. 2007). Combined production of heat and power decentrally and on-site would make sense, as the consumer is dependent on only one energy feedstock and the energy provider has to maintain only one type of system. Power production through CHP allows the capture of heat that is released in the combustion process, and this heat can be used for heating (space heating or other uses) thus improving the total

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energy efficiency of the system and in turn reducing emissions (Daniëls, Boerakker et al. 2007). Then at the regime level we have the existing electric power system that has already invested in centralized power plants and long cables and supporting assets to transfer this power from the power plants to each consumer. The regime has sunk costs, and incumbent actors have vested interests to recover the cost of their assets. At the landscape level we have developments such as global warming that calls for new innovative ways to reduce our energy usage and our emissions from energy usage.

Socio – Technical Systems

Socio-technical systems encompass both technical and institutional structures (Ottens, Franssen et al. 2006, Peter Kroes 2006). Within an energy infrastructure system, a technical structure is a physical object with a purpose. If we take away the purpose (or the functional properties) of a technical structure, what remains is just a physical object (Priemus and Kroes 2008). In this research we term technical structures as assets. These assets include machinery, pipes, buildings etc. Assets provide structure for the flow of energy, allowing actors to produce, transport and distribute energy (Herder and Verwater-Lukszo 2006, Weijnen and Bouwmans 2006). Once the investment in such assets is made the economic return period is often very long, thus inhibiting actor decisions to invest in new assets (Thissen and Herder; 2003, Geels 2004).

Mere physical objects are not assets. Their function turns them into an asset and it is their function that ties assets to human action, because it makes no sense to speak about technical functions without reference to a context of actor’s action (Ottens, Franssen et al. 2006, Peter Kroes 2006). Assets are understood through the eyes of the relevant actor, and depending on the context the same asset can have different interpretations (Bijker 2006). For example, uranium can be used to solve the world’s energy problems if it produces nuclear power to power households and industry, or on the other hand it can be used to produce a nuclear bomb that can annihilate cities. In other words, the function of an asset is grounded on the one hand in its physical properties or capacities, on the other in its relation to the intentions of actors (such as designers and users etc.). Actors design, manufacture, and implement assets to realize its function (Kroes and Meijers 2006, Vermaas 2006, Bijker 2010).

Just like the technical structure, the social (or institutional) structure of socio-technical systems is man-made (Peter Kroes 2006). An institutional structure is a set of rules established to facilitate (constrain and enable) the behaviour of actors (Ostrom 1986). Rules reduce uncertainty by providing a structure to everyday life (North 1990, Williamson 2000). Actors devise and implement rules. The point to note is that the rules are “actor-devised”, in the sense that they are a product of social interactions among actors (thus, technological constraints like the “laws” of physics are not considered to be rules) (Ostrom 1986, North 1996). Rules are not mere constructs but part of the system – rules co-evolve during the development of the STS, and they change or are changed as system processes are modified (Williamson 2000, Kunneke 2008, Naidoo 2008).

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Williamson (2000) provides a useful framework for evolution of rules, as presented in table 2.1 (Williamson 2000). This four layer model aims at distinguishing between different levels of rules and the time required to bring about changes at each level. At level 1 (lowest) we have the operation & management level where continuous operational decisions are being made in response to the technical status of the respective system; at level 2 we have the governance level where the rules evolve over 1-10 years and determine the protocols governing operational decisions; at level 3 we have the institutional environment level where the rules evolve over 10-100 years, and they determine the formal rules of the game; and at level 4 (highest) we have the embeddedness level where the rules evolve over 100-1000 years, as they are rooted in the culture, traditions, religion, etc. Furthermore, the Williamson 4-level framework also specifies the relations between the various levels and rules. Between the levels, a vertical relation exist in which the higher level constrain and shape the lower ones and in which lower levels call on (or exert pressure) higher levels, to bring about changes in the rules at the higher levels.

Table 2.1: 4-level framework for the evolution of rules (source: (Williamson 2000))

Here we will briefly discuss how the 4-level framework correlates with the MLP of the Transition Management framework. This correlation is shown in figure 2.3. The ‘Landscape level’ of the MLP correlates with the ‘Level 4: Embeddedness’ of the 4-level framework. At this level, the rules evolve over 10-100 years. The ‘Regime level’ correlates predominantly with the ‘Level 3: Institutional Environment’ and ‘Level 2: Governance’ 2 of the 4-level framework. The regime level consists of the rule-set governing the operations and development of the STS.

Level/

Time scale

Level 4: Embeddedness

Changes 102 to 103 years, often non-calculative or even spontaneous

Level 3: Institutional environment

Changes 10 to 102 years, design of overall institutional setting

Level 2: Governance

Changes 1 to 10 years, design of efficient governance regime

Level 1: Operation and Management

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Niche is a special space created within the STS. Although, a niche STS has not evolved over long periods of time, it cannot work without rules at the governance level (example: contracts), and the institutional environment level (subsidies, taxes, etc). While creating a niche, the entire established governance or the institutional environment level is not changed, but a special space is created so that the niche can operate within specially designed rules. This is made possible, because niches allow experimentation within which it is possible to deviate from the rules of the established STS. This correlation of the ‘Niche’ level with the ‘Governance’ and ‘Institutional Environment’ levels is shown as a dotted line in our figure. The dotted line imply that although this is not a direct one-to-one correlation between the levels, there are some specially designed niche rules that correlate to these levels. These specially designed rules, at the niche level, offer protection to the niches during the pre-formation phase of their development.

Rules at the ‘Level 1: Operation and management’ are not relevant for our study of transitions, as these rules are focussed on continuous adjustments and not in shaping the processes that produce new structures.

Figure 2.3: Correlation between the MLP and the 4-level framework for evolution of rules

Delineating rules

Crawford and Ostrom (1995) provide an “ADICO” grammatical syntax for delineating rules (Crawford and Ostrom 1995). The ADICO syntax is an acronym that stands for five subcomponents of an institutional structure:

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Attribute (A), Deontic (D), aIm (I), Condition (C), and Or else (O). Where Attribute is a holder for an actor to whom the rule applies to; Deontic is a holder for the three modal verbs using deontic logic (may – permitted, must – obliged and must not – forbidden); aIm is a holder that describes particular actions or outcomes to which the deontic is assigned; Condition is a holder for those variables which define when, where, how and to what extent an AIM is permitted, obligated and forbidden; and Or else is a holder for those variables which define the sanctions to be imposed for not following a rule (Crawford and Ostrom 1995).

For the purpose of this thesis we will differentiate between two kinds of rules: regulative, and normative. Regulative rules are the rules with an Or else holder, where the rule specifies which sanctions would be imposed if an actor fails to comply with a rule. Regulative rules refers to consciously designed formal rules, which constrain behavior and regulate interactions, e.g. property rights, contracts, standards (Scott 1995). Regulative rules are legally sanctioned and enforced. These rules include explicit sanctions to ensure actors follow the rules (Knickel, Brunori et al. 2009). An illustration of regulative rule is the power frequency rule, which specifies that power supplied to the grid in Europe should be 50 Hz and power in the USA should be of 60 Hz (Stam 2011).

Normative rules confer values, norms, role expectations, duties, rights, responsibilities (Geels 2005). Normative rules are without an Or else – in this case a sanction is not clearly specified. Normative rules are morally governed and enforced via normative pressures, such as social sanctioning through ‘shaming’ or ‘guilt.’ Actors follow certain ‘moral’ patterns of behaviour not because of fear of economic (or physical) sanctions, but first of all because they are part of their conscience (Knickel, Brunori et al. 2009). An example of normative rule is the Kyoto Protocol that outlines a framework for different countries to reduce their emissions, but at the same time does not define any specific sanctions if they are not able to meet their own emissions reduction targets (UNFCCC 1997).

The above two types of rules can be defined with the ADICO syntax as follows:

Regulative rules consist of the entire ADICO syntax, an Attribute, Deontic, aIm, Condition, and Or else.

Example: A windmill operator in the Netherlands must supply 50 Hz power to the grid when connected to the grid, or else he will be fined.

Normative rules include the Attribute, Deontic, aIm, and Condition (ADIC); they are without a sanction (without the Or else)

Example: A windmill operator in the Netherlands may supply power to the grid.

Similar to assets, rules are context-specific, they are understood through the eyes of the relevant actor, and depending on a context the same rule can have different interpretations for different actors. Rules are deliberately devised to address a particular time, place, and actors (Polski and Ostrom 1999). For example, the rule of security of supply implies two different things in two different countries. In countries such as the Netherlands or Germany security of supply is

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understood as almost 100% availability of power supply now and in the future (Deconinck, Belmans et al. 2006). However, this rule would not make any sense in a country such as India where power supply is intermittent at best and regular power outages are a norm as there are regularly planned brown-outs (Singh 2006, Joseph 2010).

Structure – Actor duality

Both technical and institutional structures are actor devised, but at the same time actors’ actions are constrained by the rules (institutional structures) and Assets (technical structures). Rules determine the choice of actions available at the disposal of actors (North 1990). For example, an actor is expected to pay for the natural gas he consumes; he cannot expect to avail it for free, unless clearly mentioned that way. Similarly the technical capabilities and limitations of each asset determine the actions of actors (Ottens, Franssen et al. 2006, Peter Kroes 2006). For example an actor producing power via a CHP unit in the Netherlands cannot feed-in 60 Hz power to the grid, as it is not compatible with the Dutch power system.

A duality emerges as structures (rules and assets) constrain action, but, simultaneously, action serves to produce, maintain and modify structures (Giddens 1984, Naidoo 2008). The duality ensures that actors are not free to perform any action they desire. They are part of the society and there are repercussions for any action. As presented in the discussion above, there are specified or else sanctions of regulative rules or social sanctions for norms, to shape actors actions. Structures are established by so-called "knowledgeable" and “empowered” actors, they are the actors who know what they are doing and how to do it (Giddens 1984, Baber 1991). For example, assets can be established by an actor who has the technical and business knowledge to make it happen, and rules can be established by an actor who is empowered to do so, say the Dutch government. Hence, structures must not be conceptualized as simply placing constraints on actor’s actions, but also as enabling actions. And, if sufficient actors who are knowledgeable and powerful enough act in innovative ways, their action may have the consequence of transforming the very structures that gave them the capacity to act (Sewell 1992). This can potentially bring about the changes in the structures of the STS these actors are part of, and it is in this way that a niche can potentially bring about transition.

Structure constrains actor’s actions but at the same time action is shaped by the actor’s own intrinsic needs. We assume actors are purposive actors, which means that they have a set of preferences or needs and they seek satisfactory means to pursue their needs (Hernes 1976, Hofferberth, Brühl et al. 2011). Each actor has its own attitudes, agendas, resources and perspectives – these form the intrinsic drivers for that particular actor, while developing a new structure (Brugha and Varvasovszky 2000, Patil, Ajah et al. 2009). Intrinsic needs of an actor create motivation for actor’s actions. Maslow (1943) has set up a hierarchy of five levels of basic needs for mankind (Maslow 1943). These needs capture the basic intrinsic drivers for any actor’s actions, and show why any actor has to take actions (Simons, Irwin et al. 1987):

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Physiological Needs: These are the basic biological needs - need for oxygen, food, water, etc. They are the strongest needs because if a person is deprived of all needs, he or her own survival is at stake.

Safety Needs: When all physiological needs are satisfied and are no longer controlling thoughts and behaviors, the needs for security can become active. This includes security of body, employment, resources, family, health, etc.

Needs of Love and Belonging: When the needs for safety and for physiological well-being are satisfied, the next is the need for love, affection and belongingness. Maslow states that people seek to overcome feelings of loneliness and alienation. This involves both giving and receiving love, affection and the sense of belonging.

Needs for Esteem: When the first three classes of needs are satisfied, the needs for esteem can become dominant. These involve needs for both self-esteem and for the esteem a person gets from others. Humans have a need for a stable, firmly based, high level of self-respect, and respect from others.

Needs for Self-Actualization: When all of the foregoing needs are satisfied, then and only then are the needs for self-actualization activated. Maslow describes self-actualization as a person's need to be and do that which the person was "born to do." "A musician must make music, an artist must paint, and a poet must write." These needs make themselves felt in signs of restlessness.

The classification of needs is relevant for this research, not so much the hierarchy of them as we are not going to rank which need is more relevant than others. Here we would like to point out that the basic Physiological needs for food, water, oxygen, etc and Safety needs about security, employment, health as primary drivers for an actor’s action. All these basic needs are dependent on energy, at least in most of the developed World, as energy plays a fundamental part in people’s life (UNESCAP 2006). Actors strive hard to maintain their basic lifestyle, ensure continuity and prosper. With regards to the energy system, these intrinsic drivers can be along the lines of financial resources – for example to improve the return of investment and cost recovery (Cardone and Fonseca 2003, Unnerstall 2007). Or for a Green Image eventually to help in marketing - Toyota for instance benefited a lot because of their Green (electric-hybrid) car ‘Prius’. Due to positive externalities Toyota was able to increase revenues, market share and reputation (Heutel and Muehlegger 2010). Intrinsic drivers listed above along with the extrinsic drivers modulated by the structure shape actors’ actions, creating incentives and disincentives for an actor to take actions. If an actor has no intrinsic needs (in case he has given up on survival) he would have no desire to act or to produce processes. For example, there are subsidy programs that have a fixed life-span after which they will be shut down. Actors associated with such a fixed-term program would not take action to perpetuate the project as it is bound to shut-down at the end of its lifespan. In this case extrinsic drivers alone cannot create incentives for an actor to act. This shows that both intrinsic and extrinsic drivers are necessary to shape an actor’s actions.

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P a g e | 21 Structure and Process

In this research we conceptualise structure as something static, which guides something dynamic that is the process. Although structures are static only within a chosen time frame, we conceptualize them as dynamically static or stable where they are changeable over time (Mathiassen 1987, Orlikowski 2000). This quality of dynamic stability ensures that structures within an STS can change over time and transition is possible (Newman 1996, Rotmans and Loorbach 2009).

Structures (both Assets and Rules facilitate processes within the system (Bergek, Jacobsson et al. 2008, Jacobsson and Bergek 2011). Structure within the context in which it is implemented, facilitates a process that produces the intended output (Suurs and Hekkert 2009, Bots and Daalen 2012). Structure enables or constrains actor’s actions while the actor carries out actions within the system. For example: The power grid (asset) in the Netherlands is designed and developed by the actors to facilitate the flow of power from one point to another, and the frequency standard of 50 Hz (rule) determines the frequency of the power that is transported. The operational output further modulates the drivers for the actors to act. For example: if the frequency of the power does not comply with the standard, there is a feedback loop with information, which compels an actor to take measures. As shown in figure 2.4, structures facilitate processes resulting in an Output. Here output is the flow of the power, which is modulated by the rule of the frequency standard that ensures the power flow is of required frequency and facilitated by the asset of the grid.

Figure 2.4: Structure facilitating processes, to produce output

Structure facilitates processes to produce an output. This output is fuel for rules that create external pressures to activate actors to produce processes through which new structures are created. Which in turn facilitate more processes, and the cycle continues. This can be explained with the example of the Kyoto Protocol, which is an institutional structure (rule). This rule has facilitated