market formation are inseparable issues means that policy must thus address

Market formation are inseparable issues means that

This preview shows page 76 - 78 out of 136 pages.

market formation are inseparable issues means that policy must thus address both market demand and knowledge demand. 3.3 Low-carbon infrastructures Transmission Infrastructures are central to the functioning of our high-carbon economies (Jonsson, 2000), and any change toward a low-carbon economy in-volves their transformation. 17 The infrastructure of the electrical system is particularly relevant for the development and large-scale deployment of re-newable energy technologies. Sources of renewable energy are widely dispersed across countries but are found generally in areas far from the core areas of electricity consumption. The intermittency of re-newable energy generation implies that renewable energy sources must be connected (and their power eventually stored) across very large territories to constitute a reliable source of energy (Boyle, 2012; Tawney, Bell & Ziegle, 2011) 18 (Ideally, the sun is shining and the wind blowing somewhere in the system at all times.) In this situation, the absence of transmission grids (and credible plans for their establishment) can block investments in a trans-formation of energy systems. Moreover, the cost of installing renewable energy technologies is affected adversely since the cost of grid connections is born by operators. This contributes further to the un-even competition between low- and high-carbon technologies. According to Tawney et al. (2011), the International Energy Agency estimates that a global replacement of fossil energy with renew-able energy in the period 2010 to 2050, in order 68 GLOBELICS THEMATIC REVIEW
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to halve the energy-related CO 2 emissions, would require transmission investments of USD 4.2 tril- lion, equivalent to USD 100 billion per year. To put these figures into perspective, the United States invested USD 9 billion in transmission in- frastructure in 2009. There is reason to believe that resource mobilisation is lacking. According to the American Wind Energy Association, the key issue in grid developments is that ‘transmission develop-ers are hesitant to build transmission in a region without certainty that a power plant will be built to use the line, just as wind and solar developers are hesitant to build a power plant without certainty that a transmission line will be built’ (Tawney et al., 2011, p. 8). Contemplating the necessary co-evolution of renewable energy dissemination and transmission expansion, whether in the short or long run, one is reminded of the chicken and egg problem. It has often been argued that infrastructure is a crucial element, which influences the ‘direction’ of innovation. Infrastructure is a key element within the selection environment pertaining to techno-logical choices. New technologies and technologi-cal systems (notably ‘radical’ and ‘disruptive’ ones) require specific infrastructures for their emergence and dissemination (Freeman, 2001). In the case of low-carbon development, it is necessary, therefore, to change infrastructures in significant ways. Incre- mental innovations can thrive within existing in- frastructures, while disruptive innovation requires significant transformation of infrastructures. Radi-cal
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