Cristian Pons-Seres de Brauwer, Society, Markets and Policy Group, DTU Wind & Energy Systems, Technical University of Denmark
Legislative efforts for renewables-based energy decarbonisation hinge upon the support and commitment from different market actors holding often conflicting positions regarding disruptive processes of socio-technical transformation. However, the evolving acceptance and ensuing market-shaping efforts of such stakeholders over the policy-driven promotion of renewables over time remains relatively under-scrutinized. More specifically, despite growing attention to power and politics in sustainability transitions, limited efforts remain invested for elucidating the political-economic nature of the market-based selection environments they are operationalised through, highlighting the need for a more systematic comprehension of the “politics of selection”.
To address these shortcomings, this article adopts a sociological perspective of markets to provide an and actual (rather than theoretical) understanding of the role of policy-driven markets and its participating agents in facilitating/hindering innovation diffusion and broader (system-wide) sustainability transitions. To do so, it showcases a longitudinal case study of the politics underlying Germany’s evolving feed-in policy support framework for orchestrating a market-mediated diffusion of renewables (1980s–2020). Based on policy analysis and semi-structured interviews, the study traces the changing acceptance and ensuing strategic (re)actions of market actors to the emergence and evolution of Germany’s market for electricity from renewable energy sources (RES-E market).
Results show how different market participants effectively shape the selection environments they operate in by proactively contesting/deluding the design features of the support policies organising their economised relations (e.g., market entry conditions, exchange rules, remuneration levels, pricing schemes, etc.). Such efforts have been disproportionately targeted the economic sustainability of the RES-E market, in detriment of its social and environmental sustainability. That is, market-shaping has targeted the (un)affordability of policy support costs and highlighted
cost-efficacy as the ultimate objective of the RES-E market, while simultaneously downplaying its environmental effectiveness and societal legitimacy. At the same time, the market’s selection features have been strategically (mis)used as a vehicle to further expand/retain market shares to the detriment of competing actors. Correspondingly, a number of novel market-shaping strategies are identified, namely: market gatekeeping, market usurpation, market-co-optation, market protection, and market framing.
The empirical analysis of the politics underlying the emergence and evolution of Germany’s RES-E market therefore highlights how market-shaping actions are purposively enacted by market actors in their respective attempts to secure control over market opportunities and advantages claimed by competitors. As such, they reflect the inherently political nature of selection environments as spaces of controversy, dispute, and conflict populated by market actors purposively steering the market’s legal-regulatory framework in their attempts to extract and retain influence rents: the capture of unearned marginal value by re-designing and/or perverting the “rules of the game” to one’s favour and others’ detriment.
To this end, these practices illustrate the strategic (mis)use of market-shaping policy instrumentation to enable/constrain the capacities of other actors to partake in economised relations and, by extension, re-configure the constellation of market participants. In doing so, RES support policies originally assembled for the market-mediated realisation of politically determined sustainability objectives (e.g., decarbonised energy supply) are effectively repurposed to operate as tools of market inclusion/exclusion determining the ability of different actors to participate in the market. Success in undertaking such efforts leads to the reproduction of asymmetric power relations between market participants with unequal material, financial, and operational endowments to shape the selection environments they operate in.
