Harnessing Our Values to Accelerate the Energy Transition
January 7, 2020
Energy tends to bore people until it touches on their values. But, those values are very different and prioritized in completely different ways depending on the participant.
For some, involvement in the energy transition is a moral imperative (i.e. “I want to leave Earth better for future generations”) and sometimes because it’s financially smart to do so (i.e. “We installed solar to save on our energy bill”).
Neither of those values are “wrong”. I’ve long held the belief that when it comes to the energy transition, the primary driver of an energy transition will be the latter.
Studies have shown that of the contributing factors in the implementation of renewables “commitment of government to set financial incentives” is the most important.
This isn’t just theory, we’ve seen this play out in practice. Wind and solar investments have grown exponentially in the states where the market structure (wind in TX) or tax incentives (solar in CA) create an ROI that makes sense for the participants.
Yet, that doesn’t mean we should ignore the roles that all values play in shaping our energy infrastructure. I recently came across a paper by Christine Milchram, et. al which proposes a framework for evaluating the impact of values on our material environment.
At it’s most basic level, our electricity grid is designed to connect all users and producers through the transmitting of energy with as little loss as possible.
However, there are several criteria in which we can measure the success of that premise. We could judge an energy grid on:
- market efficiency and structure
- security of supply
- technology innovation
The order and weight of these variables are greatly impacted by our individual and collective values.
A Mental Model for Evaluating Values
The model above is a modified version of the IAD (Institutional Analysis and Development) Framework proposed by Milchram to include the content of social learning.
- Material conditions = values embedded in technology, example: hydropower plants disrupt local ecological systems but provide clean energy
- Attributes of the community = values as shared normative principle
- Rules = values embedded in rules, example: taxes and laws
- Action Situations = policy making, rate cases, taxes, etc...
- Participants = individuals, institutions, and corporations with values as personality characteristics
All of these combine to drive us towards interactions and outcomes that are evaluated by a set of criteria that are set by our values.
Social Learning: A Real World Example
Social learning is the concept that individuals learn and increase the collective adaptive capacity of a system through decision-making. That is, we learn individually but adapt collectively.
That’s a powerful concept, but potentially isn’t clear without a real-world example.
Using the power grid evaluation criteria above, we can take the UK as a real world example. The first iteration of the UK’s electricity regulatory structure was likely driven by values that placed “security of supply”, “accessibility” and “affordability” above all else.
Today, under the RIIO plan, the values of the collective population are reflected by the emphasis on “sustainability” and “technological innovation” which has led to continued affordability and increased sustainability.
This isn’t to say the UK left security, accessibility, and affordability behind, but instead chose to make policies that place a greater priority on innovation given new values that were learned from the outcomes as a result of the previous regulatory framework. (Triple-loop learning in the figure above)
Harnessing Our Strengths
A blog post that concludes all of our values will contribute to an energy transition isn’t something that’s likely to get a lot of clicks. After all, we’re all supposed to take a side, right?
I fell in love with the energy sector because it requires so many different disciplines to work together. Physical sciences, social sciences, computer science, and business all coming together to craft a value chain which results in a product that none of us can live without.
The evolution of our “grid” moving forward is likely to be determined by a set of values that is just as diverse. Using a model like the one above, provides a way to incorporate what we learn from outcomes through the lens of varying values.
It’s important we step back and evaluate how those values get incorporated into the future policies that will shape the greatest institutional change of our lifetimes.