34 Brigitte Wolkinger et al.
on implementation risks only (like cluster 2), others contain mainly consequential risks (like cluster 3).
Cluster 1: Energy infrastructure
Many debates came up among different stakeholder groups when energy infrastructure clusters of risks and uncertainties were discussed. Changing demand for
electricity from renewables, challenges for the grid (stability), and the issue of
flexibility of the energy system are involved in this cluster. A controversial issue
was which segments of society will carry the burden of a transition in the energy
sector. A well- designed energy infrastructure, be it centralised or decentralised,
is a prerequisite for the energy transition and therefore involves many implementation risks in this cluster. However, risks can also occur after or during the
transition, like the supply and price volatility of renewable energy.
Misleading market rules and market design (pricing and regulations) were
mentioned as the main barriers for transition in the energy sector. Market overregulations and subsidies on fossil fuels were criticised as well, and so was the
current electricity market not including the grid.
For the energy- intensive iron and steel industry, the question of sufficient
electricity supply is key for the transition, with likely increasing electricity
Demand
Grid
Flexibility of
system
Energy
infrastructure
1
Consumers/
acceptance
NIMBY
Social justice
Behavioural
changes
4
Political and institutional
framework
Co-ordinated political
framework
Legal framework
International
co-operation
2
Risk
management
Autarky and
international trade
Pricing and
financing
Conditions of
competition of
(financial) markets
5
Lock-in effects
-
Syngergy and
conflicts
Predictability
Innovation and
technology choice
6
Timing
Environment
Resources
Technologies
Linkages to
climate change
3
Figure 3.1 Risk clusters for the transition in the iron and steel sector and the energy sector.