Institutional constraints to adaptive capacity: adaptability to climate change in the Norwegian electricity sector

Abstract

This article contributes to the understanding of adaptive capacity within national sectors by utilising two perspectives from institutional theory. Resting on data from 21 interviews the paper analyses the Norwegian electricity sector and the influence on adaptive capacity to climate change from changes in formal structure and institutional culture. The sector underwent transformational change between the beginning of the 1980s and mid-2000s, with the reform from 1991 as a watershed, and gradual consolidation from about 2000. From a self-regulated vertically integrated sector with an emphasis on robustness of supply the sector changed into a liberalised and unbundled structure, with economic efficiency as the guiding principle. These changes reduced adaptive capacity to climate change. After 2000, gradually adaptive capacity has increased somewhat. The paper argues that also social contextual factors need to be taken account of, both to understand adaptive capacity to climate change and to provide practitioners with an ability to increase it.

Keywords:

• electricity sector
• adaptive capacity to climate change
• institutional change
• adaptive governance
• regulations

Notes

Because of Norway's almost 100% dependency on hydropower, the national electricity market will fluctuate in line with yearly run-off (supply of power) and temperature (demand). The combination of high run-off and high temperatures led to a considerable production surplus in the years immediately preceding the Energy Act (Nilsen and Thue 2006, pp. 276–277).