Conceptualization of Renewable Energy Regions

Conceptualization of Renewable Energy Regions

To be able to analyse renewable energy regions, one needs to define what a renewable energy region is. As Gerring puts it: “Concept formation lies at the heart of all social science endeavours. It is impossible to conduct work without using concepts. It is impossible even to conceptualize a topic, as the term suggests, without putting a label on it. Concepts are integral to every argument for they address the most basic question of social science research: what are we talking about?” (Gerring, 2012, p. 112). This chapter will deal with the question of what we are talking about, when we speak of renewable energy regions. This is especially important, because there is no official definition of the term energy region (Ribi, Buser, von Felten, Walther, & Bernath, 2012, p. 27). Hence, we are at the very beginning of conceptualization.

The goal of renewable energy regions is to improve the economic prospects of people living in that region while at the same time reducing the negative impact on the environment that often accompanies economic growth. Improving the economic prospects of a geographically delimited region is not a new idea, which is why I will start by looking at where this idea came from and what the main drivers in this development were. Next, I will look at how these ideas connect to renewable energies to form a more specific concept. I will then go on to build the concept and define building blocks. 

1 The Theory of Economic Regions

Regions in this context are geographic areas a level below the state but above the locality or municipal level (Keating, 2004, xi). In the 19th century, when nations and national identity became the main driver of political debates and decisions, regions lost their importance for politicians and scientists (Applegate, 1999/2004, p. 131). Throughout most of the 20th century, regions continued to be ignored – power and politics were a thing for nations, not regions. Public and academic interest only returned to the regions in the 1970s and 1980s when regional unrest resurfaced (Applegate, 1999/2004, p. 135) and people started to demand explanations.

In the early 1980s, political economists, sociologists, political scientists and geographers started to become interested in the region as a central unit of social life in capitalism (Storper, 1995/2004, p. 258). One of the first to develop a significant model was Stein Rokkan. Rokkan developed a model with which he tried to systematically explain differences between territories with respect to their economic, cultural and political development (Rokkan, 1980/2004, pp. 1–2). Regionalization was soon understood to be of central importance to coordination in modern economic life (Storper, 1995/2004, p. 259). Dense and successful industrial centres such as the Silicon Valley or Toyota City further increased the interest of the public and of politics in regions and their inner workings (Storper, 1995/2004, p. 258). Storper argues that the: “role of the region is as the locus of what economists are beginning to call 'untraded interdependencies' between actors; these untraded interdependencies, generate region-specific material and non-material assets in production. These assets are the central form of scarcity in contemporary capitalism, with its fantastic capacity for production of standardized outputs, essentially because they are not standardized.” (Storper, 1995/2004, p. 259). If interdependencies were the source of regional advantages, the objective was now to find ways through which these interdependencies could be built and strengthened and find the best way to deploy regional policies. 

Regional governance was understood to have the advantages of spatial proximity to all relevant actors for cooperation and synergies and the availability of resources required for development (Keppler, 2009b, p. 12). Consequently, the region gained importance for policy efforts where politicians wanted to replicate successful patterns (Storper, 1995/2004, p. 259) and especially in Europe, a trend towards more regional governance started (Wannop, 1997/2004, p. 154).

While regional governance with its close proximity to the relevant actors would be best placed to deploy regional policies, clusters were regarded as the policy tool to achieve an improvement of interdependencies (Blien & Maier, 2008, p. 2). Clusters are regionally concentrated networks of connected firms and allow actors to save transaction costs because all important players are spatially close and can help solve problems (Blien & Maier, 2008, pp. 2–4). A number of positive properties are linked to clusters, such as better and closer relationships between actors, more trust, higher chance for growth and innovation (Blien & Maier, 2008, pp. 4–8). 

In conclusion, one can argue that regions have only recently been the focus of public and scientific interest. This new interest is mainly driven by economically highly successful regions (or clusters) and the wish of politicians to be able to replicate the success in other regions. All things considered, energy played no active role in this development. I will now move on to show how energy started to play a more active role and then led to the emergence of renewable energy regions. 

2 The Link to Renewable Energy

From my analysis of the literature it seems that two recent phenomena were significant in the emergence of renewable energy regions. Firstly, the pressure for more sustainability induced by climate change and secondly technological developments, making it possible for energy to be produced on a smaller and more local scale. 

2.1 Climate Change and Sustainability

At the core of sustainable development is the objective to improve: “the range of opportunities that will enable individual human beings and communities to achieve their aspirations and full potential over a sustained period of time, while maintaining the resilience of economic, social and environmental systems” (Munasinghe, 2009, p. 32). Very much like in the theory of economic regions, the idea is hence to improve the situation of people, with the important caveat of doing it in such a way that the development today does not harm future people’s development prospects. This objective is under serious threat from global warming, which has the potential of harming future (economic) well-being of mankind (Munasinghe, 2009, p. 140). 

At the same time, there is a strong link between energy and the economic, social and environmental dimensions of sustainable development. Firstly, economic growth very much depends on the access to energy. Secondly, access to energy affects human well-being as it is a basic social need. Lastly, energy production and use is linked to the environment (Munasinghe, 2009, pp. 313–314). Some even argue that electric energy should be considered an essential right, because it permits social integration and accessibility of various essential services (Marcio Giannini Pereira, José Antonio Sena, Marcos Aurélio Vasconcelos Freitas, & Neilton Fidelis da Silva, 2011, p. 1428). At the same time, the electric power industry is responsible for a large portion of greenhouse gas emissions. Therefore it has an important role to play in the mitigation of climate change (Ford, 2008, p. 500). 

In order to solve the challenge of improved economic prospects while not harming the environment, demand for electrical power will have to be met sustainably (Silveira et al., 2013, p. 134). Climate change and the idea of sustainable development hence are one of the main drivers for introducing renewable energy to produce electricity. A balance between social, economic, and environmental perspectives needs to be achieved in economic development (Munasinghe, 2009, p. 23). This is the first development leading to the emergence of renewable energy regions. 

2.2 Technological Innovation and Energy Generation

As mentioned earlier, economic development is closely linked to energy production (Pao & Fu, 2013, p. 382). Over the course of the 19th and 20th century, this meant increasing the size of powerplants to enable to serve the need for more and stable power and increasingly complex methods of balancing electricity production and consumption at every moment since storage of electrical energy is expensive. Centralization was the approach to achieve this, with two types of plants. The first type large and with low costs to serve the baseload. The second type smaller plants with more expensive production for peak demand (Schleicher-Tappeser, 2012, p. 70). 

Technological breakthrough started to challenge this long-standing balance. New forms of energy production through renewable energy sources allowed for a distributed power generation (Camilo, Udaeta, Gimenes, & Grimoni, 2016, p. 1). The future of energy was now seen in ubiquitous and decentralized energy systems that would work stand-alone or in networks (Droege, 2014, p. 20). This development was further pushed by progress in communication technology that would allow for organizing and managing of the more complex energy systems (Rifkin, 2011, p. 35). Rifkin characterized this development as a third industrial revolution, with a shift to renewable energy, a transformed energy production system with micro-powerplants collecting energy locally, smart grids that would use communication technology to allow for energy exchange, and storage technologies in buildings to allow for a complete switch to renewables (Rifkin, 2011, p. 37). While not all of these visions have materialized until now, the centralization trend of energy production has been replaced with a call for more distributed generation in the local (i.e. regional) sphere. 

2.3 Synthesis 

Regions can take advantage of the need for sustainable economic development due to climate change and the breakthrough of technology allowing for local energy production. Regions are seen as vital for the development and implementation of renewable energy technologies, because renewable energy technologies have to take regional factors into consideration (Keppler, 2009b, p. 13). Renewables can be found everywhere, which makes them very different from fossil fuels or uranium (Rifkin, 2011, p. 44). Small-scale and distributed generation will allow people to produce their own energy and share it through smart networks (Rifkin, 2011, p. 2). Through pooling of small-scale ‘prosumers’, volatility can be reduced and efficiencies improved (Kästel & Gilroy-Scott, 2015, p. 727). In short, the future of regions will depend on their endogenous energy systems (Droege, 2014, p. 19). Renewable energy regions are hence a logical phenomenon in the current environment. Their emergence has been made possible by new technologies, environmental pressure for more sustainability, and the insight that some policies for economic development are best deployed on a regional level to account for local conditions. These developments lay the foundation for the conceptualization of renewable energy regions which follows in the next section. 

3 A Concept of Renewable Energy Regions

With this theoretical background, I can now move on to conceptualize the renewable energy region. I start with the macro context of my concept, which is built upon the findings of the previous sections. Next, I look at the energy region itself and include findings from other studies into my concept. Lastly, I combine the two parts to form a renewable energy region concept.

3.1 The Macro Context

As mentioned above, the study of regions was pushed by the objective to understand how some regions fare much better than others from an economic viewpoint. Hence, the economy is an important first element of my concept. Next, these insights were used by politicians to develop policies to improve the development of regions. Public and politics are therefore the second part of my concept. 

In the second section of this chapter I then analysed the link between renewable energy and economic regions and concluded that there are essentially two important linkages. First, the need for sustainable development pushed by climate change, pollution, and similar issues. Secondly, technological developments that allowed energy to be produced on a local level in contrast to the trend of centralization coming from industrialization. The environment and technology and know-how therefore form the third and fourth elements in the macro context. Other studies have described similar elements as the general conditions for renewable energy regions and name for example regulations, technological and social aspects, economic conditions (e.g. price of conventional energy) as important facets to be considered (Ribi et al., 2012, p. 76). Essentially, they cover the same four areas.

Figure 2 Four quadrants of the macro context (Own illustration).

All four elements combined form the four quadrants of the macro context of my concept of renewable energy regions. Developments in these four quadrants can either hinder or facilitate the success of a renewable energy region. For example, while regional initiatives must be pushed from the region, the probability of success increases if there is support from the national level (Droege, 2014, pp. 41–44). The different quadrants are also in an interplay with each other. For example in Japan and Hawaii photovoltaic energy has in some cases already achieved grid parity, but many people are not familiar with the technology and the high upfront investment costs deter widespread adoption of solar PV (Rüther & Zilles, 2011, p. 1030). In such a case conditions in the environmental and economic quadrants are met, but require support from the know-how and public quadrants to materialize change. Developments in all four macro quadrants should hence be evaluated to determine whether they enable renewable energy regions or not. 

3.2 The Energy Region

Now that the macro context is covered, I move on to define the building blocks of energy regions. My findings here are based on studies from European energy regions in Austria, Germany, and Switzerland. 

3.2.1 Actors

A first important aspect of energy regions are all involved actors that either positively or negatively influence the process. Potential actors could be: Promoters of the idea of the energy region, investors, suppliers, plant operators, farmers, energy suppliers, energy consumers, sponsors, research and educational institutions, and the media (Ribi et al., 2012, p. 81). Hence there is a wide variety of potential actors that should be considered. Success of development of renewable energy projects depend highly on the engagement of those regional actors (Keppler, 2009c, pp. 52–53). In order to take into account all relevant actors, a network approach seems sensible (Ribi et al., 2012, p. 50). These leads to the second and third element: Core and communication. 

3.2.2 Communication

For networks to work properly, something that binds the different nodes together is required. Communication between all kind of actors or topic specific networks (knowledge, finance, etc.) acts like a glue that binds them together (Droege, 2014, p. 43). Further, communication can also help bring non-involved actors on board and create awareness for the activities (Keppler, 2009c, p. 58). These functions make communication an important success factor for energy regions (Ribi et al., 2012, p. 45). 

3.2.3 Core

While communication connects the different nodes in the network of actors, a network core can organize and push actions in a certain direction. An institutionalized regional core team could discuss and formulate realistic objectives, analyse the regions strength and weaknesses, coordinate activities, find synergies, or push the agenda on higher levels of government (Keppler, 2009c, pp. 60–61). While a core team pushing the activities in the region makes sense, it is important that this team does not act independently without consulting other actors (Keppler, 2009c, pp. 59–60). Consequently, it really should be a core of a network, and not the top of a hierarchy. 

3.2.4 Superstructure

Studies show that guiding visions are an important element of strategies of actors trying to influence socio-technical change (Späth & Rohracher, 2010, p. 457). In other words, the implementation of renewable energy technology within a region does not depend only on the technical potential but to a very large degree on the willingness of the society to take action (Keppler, 2009a, p. 73). Hence a successful energy region project builds upon a shared vision between involved actors (Ott et al., 2008, p. 4). Involvement of relevant actors is here important, but also an understanding of the local culture and community. The actors need to understand themselves as a region (Keating, Loughlin, & Deschouwer, 2003, p. 181), and local culture can have a big influence on the circumstances under which collective action and development of a shared vision is possible (Keating et al., 2003, p. 187). 

A shared vision of what the region wants to achieve can facilitate the process and can help actors to work in the same direction. Yet, there are many different objectives an energy region can pursue. For some actors the main objective is the environment, while for others an improvement of the economic situation of that region is more important (Alber, 2009, p. 132). A study of five energy regions in Austria, Germany, and Switzerland revealed that most commonly adopted strategies and objectives are (Ribi et al., 2012, p. 21):

1. High self-sufficiency: Achieve self-sufficiency by cutting demand and increasing regional energy production; 
2. Energy exports: Taking advantage of regional energy generation potential to export energy;
3. Export of energy-related technology and services: Develop a cluster for renewable energy technology and services that can export this know-how;
4. Strengthening of other value-creation chains: Support other industries within the region through renewable energy. Applies for example to tourism and agriculture, where a combination with renewable energy can strengthen the market position of those industries.

In practice, it can be observed that the strategy mix of energy regions changes over time. At the beginning the focus often lies on reaching self-sufficiency with renewable energy to decrease dependency. Later, when know-how has been build up and first successes have been realized, more complex strategies come into play (Ribi et al., 2012, p. 7). 

In my concept, this is the superstructure of the renewable energy region. It starts with a shared vision for the region which then is used as a starting point for the development of more tangible strategies and objectives. 

3.2.5 Foundation

Every region comes with input factors that are important for the project of a renewable energy region. Important factors to be considered are for example sufficient energetic potential, know-how, and appropriate locations for energy production (Ribi et al., 2012, p. 83). All these important factors that, at least in the short-term, cannot be influenced by the regional actors, are what I include as the foundation in my concept. 

Figure 3 illustrates all abovementioned aspects of my concept, forming the second part of my concept of renewable energy regions. The circles are actors which are all connected with the core of the energy region. On the top of the illustration is the superstructure, on the bottom is the foundation. 

Figure 3 Renewable energy region (Own illustration).

3.3 Synthesis

My concept of renewable energy regions is founded on the combination of the two parts: the macro context and the micro-framework of the energy region. As one can see, the energy region lies within the four quadrants of the macro context. The dashed lines indicate that the border between the energy region and the macro context it is situated in is permeable. This makes sense, since I described earlier that there is no clear definition of an energy region, i.e. the geographic boundaries of an energy region are not per se congruent with official boundaries. 

Furthermore, the transparency of the region indicates that the four quadrants of the macro context also have region specific forms and characteristics. Next, I would like to emphasize that the network of actors is not confined to actors only within the region. Some actors that are part of the network are outside the boundaries of the region. 

Lastly, I would like to draw attention to the superstructure and foundation of the region. The superstructure is influenced not only by the regional actors, but also by the visions and trends of public, politics and economy on the macro context. In other words, if a region is trying to achieve a vision that is not supported by the macro context, it might run into strong opposition. As discussed above, some regional activities depend on the support from higher level actors (Keppler, 2009c, p. 57). The same is valid for the foundation. The regional foundation profits from and is also impacted by elements of the environment, know-how and technology of the macro context. 

Figure 4 Concept of renewable energy regions (Own illustration).