community understood the potential and started to support these developments
through targeted research initiatives into technological opportunities and transition
pathways. In the political discourse these became solutions to what was established
as a societal challenge and the first small feed-in tariff regulation in 1991 encouraged credit for technology pioneers.
Following Germany’s 1998 elections, a new coalition government incorporating
the Green Party started to develop renewable energy support schemes and the
anti-nuclear agenda became a fully-fledged Renewable Energy Act. By 2000 this
included not only an agreement on phasing out nuclear power plants over the
following 25 years, but also differentiated support schemes for different renewable
energy technologies. These were available to all end users of electricity who wanted
to become producers by installing small-scale solar, wind or biomass power plants.
The ‘feed-in tariff’ scheme provided guaranteed prices per kilowatt-hour of
renewable energy fed into the national energy grid over 20 years. It obliged electricity utilities to purchase this energy but allowed for them to push the cost onto the
final consumer bills.
This mechanism effectively created a return on investment security that attracted
conventional banks and risk-averse investors into lending small enterprises, farmers
and citizens money to install renewable energy technology. For the first time there
was a technology market in a sector previously dominated by a few big companies
whose long-subsidized centralized coal and nuclear energy infrastructure seemed
more like oligopolies. Since these older business models had rendered the transaction costs of switching to renewable energy solutions prohibitively pricey in the
past, no pioneering movement had been possible. The Renewable Energy Law
hedged the risks of a plethora of new, decentralized energy producers and unleashed the competitive activity of many small- and medium-sized enterprises (SMEs)
active in technology development.
By the mid-2000s the tipping point into the acceleration or navigation phase had
been reached, and pioneering activities had become mainstream considerations.
Fossil energy suppliers now felt threatened and tried to fight the regulation at all
levels, e.g., attempting to make the EU declare feed-in tariffs incompatible with
energy market integrations. But the renewable energy sector grew very quickly,
created many jobs in rural areas with high unemployment and turned Germany into
an international technology leader that inspired other countries. Thus, an environmental issue had found technology solutions and became solidly economic when it
served the export interests of the German economy and found wide, bottom-up
citizen support.
The share of renewable energy in the electricity mix increased steadily,
debunking the strongly spun narrative that renewable energy systems were technologically unfeasible—although concerns about black-outs remain. However, a
new narrative was established in which a transformation of the energy sector was
both possible and in progress, drawing in many new participants.
However, unexpected side effects—like rapidly dropping prices for solar technologies; changes in international production relations (solar panels imported from
China were much cheaper and their German purchasers were also entitled to the
2.1 Digging into Societal Transformation and System Innovation Research
27
through targeted research initiatives into technological opportunities and transition
pathways. In the political discourse these became solutions to what was established
as a societal challenge and the first small feed-in tariff regulation in 1991 encouraged credit for technology pioneers.
Following Germany’s 1998 elections, a new coalition government incorporating
the Green Party started to develop renewable energy support schemes and the
anti-nuclear agenda became a fully-fledged Renewable Energy Act. By 2000 this
included not only an agreement on phasing out nuclear power plants over the
following 25 years, but also differentiated support schemes for different renewable
energy technologies. These were available to all end users of electricity who wanted
to become producers by installing small-scale solar, wind or biomass power plants.
The ‘feed-in tariff’ scheme provided guaranteed prices per kilowatt-hour of
renewable energy fed into the national energy grid over 20 years. It obliged electricity utilities to purchase this energy but allowed for them to push the cost onto the
final consumer bills.
This mechanism effectively created a return on investment security that attracted
conventional banks and risk-averse investors into lending small enterprises, farmers
and citizens money to install renewable energy technology. For the first time there
was a technology market in a sector previously dominated by a few big companies
whose long-subsidized centralized coal and nuclear energy infrastructure seemed
more like oligopolies. Since these older business models had rendered the transaction costs of switching to renewable energy solutions prohibitively pricey in the
past, no pioneering movement had been possible. The Renewable Energy Law
hedged the risks of a plethora of new, decentralized energy producers and unleashed the competitive activity of many small- and medium-sized enterprises (SMEs)
active in technology development.
By the mid-2000s the tipping point into the acceleration or navigation phase had
been reached, and pioneering activities had become mainstream considerations.
Fossil energy suppliers now felt threatened and tried to fight the regulation at all
levels, e.g., attempting to make the EU declare feed-in tariffs incompatible with
energy market integrations. But the renewable energy sector grew very quickly,
created many jobs in rural areas with high unemployment and turned Germany into
an international technology leader that inspired other countries. Thus, an environmental issue had found technology solutions and became solidly economic when it
served the export interests of the German economy and found wide, bottom-up
citizen support.
The share of renewable energy in the electricity mix increased steadily,
debunking the strongly spun narrative that renewable energy systems were technologically unfeasible—although concerns about black-outs remain. However, a
new narrative was established in which a transformation of the energy sector was
both possible and in progress, drawing in many new participants.
However, unexpected side effects—like rapidly dropping prices for solar technologies; changes in international production relations (solar panels imported from
China were much cheaper and their German purchasers were also entitled to the
2.1 Digging into Societal Transformation and System Innovation Research
27