Managing Uncertainties in the Transition Towards Sustainability: Cases of Emerging Energy Technologies in the Netherlands

Abstract

Steering technological innovation towards sustainability is a fundamental part of governance for sustainable development. This article uses the term transition to indicate that sustainable technology development not only involves technological changes, but also changes in social and cultural dimensions. The direction and speed of transitions are determined largely by the collective innovation decisions of various actors involved. This article focuses on uncertainties from an actor-perspective, since the uncertainties perceived by the actors involved will influence their decisions greatly. Special attention is given to the entrepreneurs: business firms involved in developing and implementing technological innovation. By examining two empirical cases of emerging sustainable energy technologies in the Netherlands (micro-CHP and biofuels), we demonstrate which types of perceived uncertainties influence the innovation decisions of the actors involved and how these actors respond to perceived uncertainties. Uncertainty about government policy was dominant in both cases. Comparison of both case studies shows that uncertainties have a greater negative effect on innovation decisions when the time-to-market is smaller.

Keywords:

• Perceived uncertainty
• technological innovation
• transition management
• sustainable energy technology

Acknowledgement

This article is supported financially by NWO (Dutch Organization for Scientific Research) and KSI (the Dutch Knowledge network on System Innovations and transitions). The authors would like to thank the interviewees of the micro-CHP case. Roald Suurs is acknowledged for collecting data on the development of biofuels in the Netherlands.

Notes

1. Non-commercial adoptors are not considered entrepreneurs.

2. For example, an important consumers' characteristic for energy technologies is the energy demand.

3. The concept of ‘innovation system’ is a heuristic attempt developed to analyze all such societal subsystems, actors and institutions contributing, in one way or another, directly or indirectly, intentionally or not, to the emergence or production of innovation (Hekkert et al., 2006).

4. The term ‘key activities’ is used when referring to the actor-level and the term ‘functions’ when referring to the system-level. If a function is being fulfilled well, this means that actors have developed many key activities that contribute to this function. To illustrate, attending a conference or organizing a workshop are examples of actors' key activities, that contribute to the function of ‘knowledge diffusion though networks’.

5. All four technology developers that were, at the time, developing activities in the Netherlands were interviewed.

6. The group of potential adopters consisted of organizations that can play an important role in generating intermediary demand for micro-CHP (i.e. energy companies and housing organizations). It was not possible to interview end-users (house owners or tenants), as they have not been involved in the development activities and have not yet been made aware of micro-CHP.

7. Most of the uncertainties that the interviewees mentioned (without having knowledge of our typology of uncertainty sources in this stage of the interview) related to technology or politics. When the interviewees had to rank the uncertainty sources according to their relative importance, technological uncertainty and political uncertainty scored overall highest, followed by consumer uncertainty. Four interviewees clarified their ranking by stressing that technological uncertainty and political uncertainty were far more important in this early stage of development than the other uncertainty sources.

8. Whereas the regular energy policy is aimed at short-term goals (approx. ten years from now), the energy transition policy focuses on the long term. The energy transition policy is based on a different, more process-orientated, governance approach. Some key elements of the ‘energy transition policy’ involve heterogeneous actors, stimulating learning processes, and creating a wide playing field. For a comparison between the two approaches, see Rotmans (2003).

9. The alternative focus is a direct result of differences in research strategy. Contrary to the CHP case, the biofuels case was analysed according to functions of innovation systems method, as reported in Suurs & Hekkert (2005). Due to these differences in data collection methodology, we are unable to order the importance of the different uncertainties. However, the data allow us to analyse the effect of different uncertainties on entrepreneurial action. The emphasis is on political uncertainties due to a bias in data availability.

10. In the research program that led to this article, additional case studies are being performed on uncertainty perception in technological trajectories around biomass gasification and biomass combustion.