Energy Policy 98 (2016) 266–273
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Energy Policy journal homepage: www.elsevier.com/locate/enpol
Energy sprawl, land taking and distributed generation: towards a multi-layered density Stefano Moroni a, Valentina Antoniucci b,n, Adriano Bisello b,c a
Polytechnic University of Milano, Via Bonardi 3, 20133 Milan, Italy Department of Civil, Environmental and Architectural Engineering, University of Padova, via Venezia 1, 35151 Padova, Italy c EURAC Research, Institute for Renawable Energy, Viale Druso 1, 39100 Bolzano, Italy b
H I G H L I G H T S
Energy sprawl is not a necessary consequence of the transition to renewable sources. A polycentric, distributed renewable energy system reduces land consumption. This polycentric model is founded on building-related renewable energy production and micro-grids. Enabling rules, simpliﬁed compliance, and tax cuts can foster this result. The concept of multi-layered density is proposed as a new framework for interpreting this scenario.
art ic l e i nf o
a b s t r a c t
Article history: Received 15 June 2016 Received in revised form 27 August 2016 Accepted 31 August 2016
The transition from fossil fuels to renewable resources is highly desirable to reduce air pollution, and improve energy efﬁciency and security. Many observers are concerned, however, that the diffusion of systems based on renewable resources may give rise to energy sprawl, i.e. an increasing occupation of available land to build new energy facilities of this kind. These critics foresee a transition from the traditional fossil-fuel systems, towards a renewable resource system likewise based on large power stations and extensive energy grids. A different approach can be taken to reduce the risk of energy sprawl, and this will happen if the focus is as much on renewable sources as on the introduction of distributed renewable energy systems based on micro plants (photovoltaic panels on the roofs of buildings, micro wind turbines, etc.) and on multiple micro-grids. Policy makers could foster local energy enterprises by: introducing new enabling rules; making more room for contractual communities; simplifying the compliance process; proposing monetary incentives and tax cuts. We conclude that the diffusion of innovation in this ﬁeld will lead not to an energy sprawl but to a new energy system characterized by a multi-layered density: a combination of technology, organization, and physical development. & 2016 Elsevier Ltd. All rights reserved.
Keywords: Energy sprawl Renewable energy Distributed generation Urban density Smart grid Prosumers
“Any serious effort to develop a decentralized energy system will inevitably require a different set of institutional arrangements to that which supports centralized energy production” (Johnson and Hall, 2014). “Despite the beneﬁts of distributed generation, renewable energy policies tend to promote development of large renewable energy generation systems located far from urban centers of power consumption” (Powers, 2013). “By far the biggest barrier to the creation of micro-grids is n
Corresponding author. E-mail addresses: [email protected]
(S. Moroni), [email protected]
(V. Antoniucci), [email protected]
(A. Bisello). http://dx.doi.org/10.1016/j.enpol.2016.08.040 0301-4215/& 2016 Elsevier Ltd. All rights reserved.
contradictory, unclear, or hostile law” (Bronin, 2010).
1. Introduction The transition from power systems burning fossil fuels to renewable energy sources can produce much-needed beneﬁts, ranging from less air pollution to more energy security, or broader access to energy, up to the establishment of a new economic paradigm, the so-called “low-carbon economy”. This energy transition is at the top of many political agendas nowadays. In Europe, short-and medium-term targets are deﬁned in the 20-20-20 Package and the Framework 2030 (da Graça Carvalho, 2012). But
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the most ambitious vision is outlined in the EU Roadmap 2050, which suggests a development path designed to cut European emissions to 80% lower than they were in 1990 (by 2050). For this challenge to be feasible and affordable, all sectors need to be involved in developing cost-effective solutions. In particular, the growth of renewables in the electricity sector plays a crucial part in the decarbonization and diversiﬁcation process. As clearly stated in the EU Roadmap 2050, despite the expectation that electricity consumption will continue to increase, the corresponding greenhouse gas emissions would be reduced by between 93% and 99%. Such an impressive goal demands a massive penetration of renewables in the power sector in order to beneﬁt from their nearzero emissions factor. Judging from the results obtained by Turconi, Boldrin and Astrup (2013: 560) using the life cycle assessment method, only 13–190 kg CO2-eq are produced for every 1 MW h generated by photovoltaic systems, and 3–41 kg CO2-eq using wind power, as opposed to 660–1050 kg CO2-eq if we burn hard coal, or 380–1000 kg CO2-eq using natural gas. As the U.S. Department of Energy (2008: 127) put it, we can reduce CO2 emissions by up to 99% by using wind instead of coal, while using wind instead of gas means a CO2 saving close to 98%. The global share of renewable power generation was 22% in 2013, and is expected to rise to more than 26% by 2020 (OECD/IEA, 2015). The contribution of renewables for electricity generation to the achievement of the global targets speciﬁed in international agreements is noticeable and feasible, bearing in mind that “all countries in the world have at least one abundant renewable resource and many countries have a portfolio of resources” (IEA, 2016). While they see the beneﬁts, many observers are concerned that the diffusion of renewable resources may be responsible for a socalled “energy sprawl”, i.e. an increasing use of available land to build new energy facilities (based on renewables) (Muller, 2012).1 The present article discusses whether this is a real threat. Land occupation is an important metric to consider when assessing different energy production systems, though it may not necessarily be the primary, overriding concern (Moroni, 2013, 2016). While we are not “in a world of mounting land scarcity” (Hernandez et al., 2015: 13581),2 we should nonetheless seriously consider land taking too (Howard et al., 2009). The debate on distributed energy production – and electricity generation in particular – is prevalently focused today on technological issues, with some economic reﬂections thrown in, at most. But it seems fundamental to cast the net wider and include other issues, and primarily the institutional and organizational aspects involved (which have been largely ignored so far3). Energyrelated transitions are always inherently socio-material transitions 1 In very general terms, energy sprawl is “the phenomenon of ever-increasing consumption of land, particularly in rural areas, required to site energy generation facilities” (Bronin, 2010: 547); that is, the increasing amount of land altered for energy production (Jones and Pejchar, 2013). The central question here is how much energy is produced in a given amount of space (McDonald et al., 2009). On the concept of “energy sprawl” see also Rule (2010), Outka (2011 and 2012), Pocewicz et al. (2011), and Jones et al. (2015). 2 As regards the United States, for instance, the percentages of the principal categories of land use reported for the year 2007 were: (a) urban: 3% of the total; (b) forestry: 30%; (c) grassland, pasture, and range: 27%; (d) cropland: 18%; (e) special uses (mainly parks and wildlife areas, also including rural transportation and national defense areas): 14%; (f) miscellaneous (such as tundra or swamps): 9% (Nickerson et al., 2007). 3 As underscored by Hoffman and High-Pippert (2005), Alanne and Saari (2006), Ribeiro et al. (2012). More speciﬁcally regarding the issue discussed here, Friedrichsen et al. (2014: 264) made the point, for instance, that the institutional set-up of the smart distributed energy system “is still uncertain”; Johnson and Hall, (2014 also said that “the systemic institutional transformation necessary to support the widespread adoption of community/decentralized energy schemes … [has] … received limited attention to date”.
because they inevitably also involve institutions and users' organizations and behavior, not only natural resources and physical infrastructure (Calvert, 2015: 11). In this regard, adopting a new idea of (multilayered) density may enable the debate to be developed from a fresh overall perspective because it brings together the three main elements of the problem discussed here: technology, organization and spatial development. The article is organized as follows: Section 2 considers a desirable (polycentric) energy generation scenario; in Section 3 we discuss the advantages of this scenario (in terms of reducing land taking and other beneﬁts); Section 4 concerns the policies that could facilitate the transition process; and Section 5 is devoted to the conclusions.
2. A polycentric scenario: two main elements A desirable distributed and polycentric scenario is based on building-related renewable energy production (Section 2.1), and new forms of local contractual community (Section 2.2). 2.1. Building-related renewable energy production (and micro-grids) Those who are concerned about energy sprawl generally assume that the transition underway is from the traditional fossilfuel burning systems with their large power plants and long transmission lines4 towards a system that exploits renewable resources but is likewise based on large power stations (e.g. largescale multiple photovoltaic plants or large wind farms) and extensive energy grids.5 Hernandez et al. (2015: 13579) write that, “If up to 500 GQ of USE [utility-scale solar energy] may be required to meet the United States-wide reduction of 80% of 1990 greenhouse gas emissions by 2050, 71,428 km2 of land may be required (roughly the land area of the state of South Carolina) assuming a capacity factor of 0.20”. On the other hand, a different organizational approach that involves distributed energy systems based on building-related renewable energy production (Bronin, 2012) and micro-grids can effectively reduce the risk of energy sprawl and excessive land occupation. Unlike the existing transmission and distribution networks (designed to deliver unidirectional power ﬂows to consumers), smart micro-grids involve users interactively within local grids. Current advances in energy storage technology (Chen et al., 2009; Toledo et al., 2010) are also crucial to the full enablement of “prosumers” (producers cum consumers) in such micro-grids. It is important to emphasize that, in a distributed energy systems scenario, on-site power production would cover not only lighting, heating, and cooling, but could also be used to sustain clean mobility solutions. Though challenging, the integration of electrically-powered vehicles in smart distributed energy systems has great potential, also because batteries and chargers for electric vehicles (i.e. bicycles, cars, segways and the like) may be suitable for storing energy and covering mismatches between production and load peaks (Barkenbus, 2009; Waraich et al., 2010; Delucchi and Jacobson, 2011; Zakariazadeh et al., 2014). The distributed energy framework thus brings together two of the main sources of energy consumption, traditionally approached and considered 4 Today, electricity is mainly produced by large power plants located far from developed areas, and distributed to end-users via long, complex networks of power lines. The United States electric grid comprises more than 482,000 km of power transmission lines (U.S. Department of Energy, 2013). Italy's national power grid currently has more than 72,000 km of cables (Terna, 2016). 5 For a discussion on the environmental impacts of large-scale solar power plants, including land taking, see Turney and Fthenakis (2011), and Hernandez et al. (2014 and, 2015); for macro-wind turbines, see Diffendorfer and Compton (2014).
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separately, i.e. buildings and transportation. In the urban setting at least, we should start thinking in terms of an integrated, renewables-based, smart energy system for our living and mobility needs. In short, we are seeing a shift in spatial and technological density: from large centralized plants feeding a hierarchical distribution grid to physically and technologically dense nodes forming part of a polycentric system based on multiple smart micro-grids. 2.2. New forms of contractual community When we discuss distributed energy systems, the term “distribution” refers not only to the scale and location of the micro power units involved, but also to their ownership, the related decision-making, and the responsibility for their use (Alanne and Saari, 2006; Adil and Ko, 2016). In other words, distributed energy means much more than just smaller energy units installed closer to consumers. Establishing new, local energy systems also demands an innovative organizational framework that has not been adequately considered to date. The multiple nodes of this new polycentric electricity production system (Goldthau, 2014) will include not only individual homes, stores, or industries – as is often assumed, even by the relevant regulatory bodies6 – but also new, intentionally-adopted forms of community (i.e. communities of choice, not communities of chance or fate), based on relationships between members deﬁned by explicit agreements. Energy production and distribution become closely linked with new forms of (private) self-governance, i.e. independently organized prosumer collectives. Among the main motives for becoming part of such energy communities, e.g. to reduce costs, do “the right thing”, consolidate a local identity, etc. (Bomberg and McEwen, 2012; Doci and Vasileiadou, 2015), there is also a strong desire to be self-sufﬁcient. In an empirical analysis of energy communities, Bomberg and McEwen (2012: 441) found that community identity was often mentioned as one of the reasons for the scheme. But, “closely linked to community identity is the idea of community sustainability and autonomy – the notion that a community can survive on its own, relatively free from dependence on ‘outsiders’ (including government authorities), and enjoy the freedom to make its own decisions, and determine its own future”. Bomberg and McEwen concluded that the groups that they studied “garnered support for renewable initiatives by calling upon a tradition of self-reliance, and the promise that renewables could bring to communities seeking to maximize their autonomy and resilience” (ibid.: 412). Energy communities may be established merely to deal with energy issues, or they may coincide with place-based contractual communities (Foldvary, 1994; Nelson, 2005; Moroni, 2014), such as home-owners' associations, residential cooperatives, cohousing complexes, or multi-tenant properties (on this speciﬁc issue, see Wiseman and Bronin, 2013). This last case might be the most promising. If place-based communities are conceived and designed as integrated energy management systems, they will be able to approach multiple energy-consuming services holistically, in an integrated manner (Mendes et al., 2011; Antoniucci et al., 2015a, 2015b). Lowi and MacCallum, (2014) made the point that integrated energy management systems could deal simultaneously with services such as electric power, lighting, heating, air conditioning, water supply or sewerage systems, waste management, and communications. Clearly, these units could easily form coalitions to create wider 6 This point is aptly underscored by the Energy and Strategy Group (2014); compare with Goulden et al. (2014: 23): “Contemporary policy-makers commonly approach energy demand issues with an individualistic model of attitudes and choice”.
frameworks, such as private associations of private communities. Their desirability and feasibility would be decided case by case, from a bottom-up perspective. In short, the “transition to a sustainable energy system may also lead to the social transformation of communities and neighborhoods” (van der Schoor and Scholtens, 2015: 667). Energy communities will thus represent a new form of organizationally dense nodes in a polycentric non-hierarchical network of multiple (community) nodes with a bottom-up structure. The development of a differently distributed technological and spatial scenario (Section 2.1) therefore also gives rise to a new form of distributed organizational density.
3. Main advantages The above-outlined scenario has several advantages, primarily in terms of containing land occupation and consumption (Section 3.1), but other collective and individual beneﬁts can be expected too (Section 3.2). 3.1. Reducing land taking Territorially distributed small power plants exploiting renewable resources (such as photovoltaic panels installed on buildings, micro wind turbines, geothermal heat pumps, etc.) ﬁt into the built environment far more easily, with far less impact on the natural environment and landscape (Dunn, 2002). As Outka (2011: 302) writes, “Onsite energy generation minimizes the footprint with rooftop solar panels, small-scale wind, and combined heat and power systems built into existing structures”. Distributed energy systems help to do away with the need for fossil fuel extracting and mining sites, large power plants, and long transmission lines that spoil the landscape and are typical of the traditional centralized energy system (Akorede et al., 2010; Bronin, 2010; Warren, 2014). So distributed energy systems are more of an antidote to energy sprawl than a cause. This becomes very evident if we focus on building-related renewable energy and micro-grids rather than on renewable sources per se. As Warren (2014: 365) writes, “Distributed generation projects … are small and do not require large amounts of land for the construction of power plants. Many sources can even be developed on existing infrastructure, which further decreases the chances of additional negative environmental impact. Finally, they require few or no transmission lines to distribute the electricity to the end users. As a result, less land is disturbed”. According to the U.S. Department of Energy (2004), cities and housing units cover 140 million acres in the United States. The country's electricity requirements could be satisﬁed by applying photovoltaic panels to 7% of this surface area: on building rooftops and walls, parking lots, along highway barriers, and so on. In short, “We wouldn't have to appropriate a single acre of new land to make PV our primary energy source” (ibid.: 1). A recent Italian study on the real potential of photovoltaic rooftops in a few mountain villages concluded that 2.5 kW per capita of installed capacity are still achievable, even after excluding historical buildings and inappropriate or underperforming locations (Moser et al., 2014). This result is in line with similar international studies that identiﬁed 2 kW per capita as the reference photovoltaic capacity in urban environments (Moser et al., 2015). Even adopting a conservative insolation value of 1000 kW h/m2, there would theoretically be an over-abundant yearly production to cover the average domestic power consumption (1000–1300 kW h per capita), without invading a single square meter of farm land or forest. Large wind farms might be questionable from the land use perspective because of the space needed for large turbines and the
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related infrastructure (access roads, electric cables and sub-station, control buildings, etc.). But if we concentrate on distributed generation and local grids, then our main interest lies in small wind turbines. “Distributed wind energy development has distinctive characteristics that make it an attractive source of alternative energy. Unlike industrial-scale wind energy projects, small wind turbine installations do not require the construction of costly access roads and transmission lines across vast stretches of rural land and thus pose less of a threat to wildlife and conservation areas” (Rule, 2010: 1237).7 Small wind turbines are generally no more than 7 m in diameter and have a power output of 1–10 kW (Rolland and Auzane, 2012), although “the discrepancy of the upper capacity limit of small wind ranges between 15 kW and 100 kW for the ﬁve largest small wind countries” (Pitteloud and Gsänger, 2016: 11). They are intended to generate small amounts of power, and they can work at lower wind speeds than the turbines designed to provide utility-scale power (U.S. Department of Energy, 2007).8 It is important to stress here that the end-users' energy demand is generally very small: for instance, three in four commercial and residential consumers in the United States use electricity at very low average rates, no more than 12 and 1.5 kW, respectively (Bronin, 2010). 3.2. Five ancillary advantages In addition to limiting land occupation, a polycentric system comprising multiple local community-based energy systems has at least another ﬁve advantages. First, distributed energy production (from renewable sources) strongly reduces the power losses during transmission and distribution typically associated with traditional centralized systems9 because the site where the power is generated is physically closer to the load (U.S. Environmental Protection Agency, 2011). As an example, energy demand in Italy in 2013 was 318,000 GW h, and grid losses exceeded 21,000 GW h (Terna, 2013). At a current consumer price of 0.2 Euro/kW h, if it were possible to avoid these losses completely, the country's energy bill would be 4.2 million Euro lower.10 Distributed energy systems based on renewable sources also reduces the risks and consequences of power outages, which pose increasingly severe problems for traditional centralized systems.11 In short, some changes to the physical architecture of the system are needed to prevent or manage peaks in demand, and to diversify the power supply systems and sources to improve the energy system's overall resilience (Evans and FoxPenner, 2014). Second, distributed energy systems based on renewable sources reduce greenhouse gas emissions (mainly CO2) and other air 7 The matter is different when biomass is used to generate electricity, but this issue is not discussed here; in this regard, see Outka (2011) and McDonald et al. (2009). 8 On small wind turbines, see also Mertens et al. (2003), Glass and Levermore (2011) and Li et al. (2014). 9 Some examples of electric power transmission and distribution losses (% of output) in various other countries in 2013: Argentina (16%); Brazil (16%); Denmark (6%); Germany (4%); Sweden (7%); India (18%); Italy (7%); Morocco (16%); Pakistan (17%); Portugal (11%); Spain (9%); South Africa (8%); Russian Federation (10%); Turkey (15%); United Arab Emirates (7%); United Kingdom (8%); United States (6%) (World Bank, 2016). 10 Though it could prove difﬁcult to meet all local industrial needs, which account for 42% of inland consumption. 11 The well-known 2003 blackout in the United States and Canada, when some areas were without electricity for four days, cost an estimated $4–8 billion, considering: (a) the costs associated with spoiled or lost commodities; (b) lost income for workers; (c) the costs to the utilities affected; (d) the extra costs to government bodies (Bruch et al., 2011). On large blackouts in North America, see Hines et al. (2009).
pollutants, such as ozone, carbon monoxide, nitrogen oxides, sulfur oxides, particulate matter, and lead. While it may take time to induce beneﬁts in terms of limiting climate change, the positive effects on air quality and public health, and the beneﬁcial fallout on local ecosystems will become apparent more quickly (Bell et al., 2008). The levels of electromagnetic radiation, generated by traditional long high-voltage power lines, will decrease too. Both market and non-market techniques are available for quantifying the health beneﬁts in terms of morbidity and/or mortality rates. Bell et al. (2008) conducted a review on several variables and related issues considered in this ﬁeld, including cost of illness, human capital, willingness to pay, and quality-adjusted life-years. According to a study cited by the U.S. Environmental Protection Agency (2011), lowering nitrogen oxides concentrations carries morbidity and mortality-related beneﬁts in the range of $7.5 to $13.2 dollars per ton of CO2 avoided. In addition to their impact on ecosystems, pollutants are also threatening our cultural heritage and causing material damage to buildings (Aunan et al., 2004; Bollen et al., 2009; Tidblad et al., 2012; Ürge-Vorsatz et al., 2014). Third, distributed energy systems based on renewable sources foster experimentation, innovation and competition. They promote the creation of non-hierarchical, competitive networks that are more ﬂexible in responding to changing market situations and customer needs. They also limit monopolies and have the potential to encourage new market growth. Fourth, distributed energy systems based on renewable sources give individuals more freedom. They enable consumers to become self-sufﬁcient, reduce their dependence on centralized services, and broaden their choices. Distributed energy also supports a wider range of solutions better tailored to the wishes and needs of individuals and small groups (Antoniucci et al., 2015a). Fifth, distributed energy systems based on renewable sources add to the value of residential buildings, being a technical feature that is appreciated by the market. Dastrup et al. (2012: 972) used two different methods to analyze a sample of residential units in San Diego County (CA), and demonstrated that “solar panels are capitalized at roughly a 3–4% premium”. In addition, almost all ofﬁce property transactions nowadays concern buildings with a high energy performance (Eichholtz et al., 2010).12
4. Five enabling policy measures The current institutional and regulatory framework has favored large-scale, centralized energy production systems by establishing and defending a body of rules that has fostered the emergence of giant energy providers. The traditional model of centralized energy production and distribution is so deeply embedded in this system of rules that any attempt to introduce signiﬁcant changes is usually strongly resisted (Goldthau, 2014), due not only to vested interests, but also to a widespread inertia (Kiesling, 2010). In this section we focus on how to facilitate the development and diffusion of contractual communities organized to produce electricity and other facilities. As mentioned earlier, we consider such communities as one of the key ingredients in a broad and diversiﬁed polycentric system. To foster local energy enterprises, 12 According to some, distributed energy systems based on renewable sources and micro grids might also tackle energy poverty issues (Oldﬁeld, 2011; Yadoo and Cruickshank, 2012), and the inability to ensure adequate indoor temperatures. In winter, cold homes can be a cause of severe thermal stress, even to the point of threatening occupants' health; this is usually recognized as a consequence of the so-called “heat or eat” phenomenon (Ryan and Campbell, 2012: 17). But the effects of extreme heatwaves are important too: for example, Bone et al. (2010) reported over 2000 extra deaths as a result of thermal stress in the U.K. in the summer of 2003.
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and unlock the opportunities afforded by distributed energy, at least ﬁve types of action are needed: (i) any protectionist strategies must be abandoned; (ii) new enabling rules must be implemented; (iii) there has to be more room for different types of contractual community; (iv) compliance issues need to be simpliﬁed; and (v) incentives and tax cuts are warranted. The ﬁrst measure involves removing all forms of protectionism that often persist in defending traditional centralized energy production methods (Newcomb et al., 2013). Some initial steps towards a greater liberalization of the energy sector were taken in several developed countries during the 1980s and 1990s (Boyd, 2014), but the process remains incomplete in many cases (Bridge et al., 2013), and it should become more profound and radical. The second measure involves changing local land use regulations and building standards that make it difﬁcult to install micro power plants. As Bronin (2008: 248) writes, even today, “local land use laws thwart private builders' growing interest in building green”. In Europe and the U.S., there are still local building standards and planning regulations in place that govern land and building use too strictly, based on a now obsolete approach. Some regulations are simply too detailed and restrictive; others even explicitly ban “green technologies” from certain urban areas, based on the misconception that they are intrinsically unattractive and incompatible with historical buildings. Moreover, zoning and building regulations often differ considerably from one municipality to another, thus hindering the adoption of standard solutions and negatively affecting the replicability of successful experiences. To take a new perspective, three main steps are crucial. For a start, height restrictions, setback requirements, rights of way, and so on, should be reconsidered so that they no longer interfere with the installation and functionality of renewable energy systems. It is worth stressing here that many “green technologies” are not as unattractive as municipal planners seem to believe. Producers are making great efforts to better integrate their technologies in different kinds of building (Bronin, 2008). Some recent remarkable examples include: the Velux Headquarters in Hebei (China); the Kuggen Ecopilot Ofﬁce Building in Boras (Sweden); or the Refuge du Gouter in Mont-Blanc (France). In addition, building codes should focus more on performance standards than on physical speciﬁcations. There should also be more uniform regulations relating to the built environment, and far fewer differences between the norms adopted in different regions, and from one municipality to another (Salkin, 2012). The variety of norms applicable to different locations undermines standardization in the construction industry, and this contributes to keeping building costs high, even for well-known technological solutions.13 The third measure needed to further the growth of the distributed energy sector consists of three main elements. First, all kinds of contractual community should be allowable – not only cooperatives, on which attention is usually focused,14 but also the other various types of self-organized community, such as cohousing complexes, home-owners' associations, multi-tenant properties, etc. (Moroni, 2014). Second, any form of contractual community that produces electricity or other primary services should be free to sell any surplus that it produces. Third, intentional islanding should be recognized as a right: individuals and 13 For instance, the EU Directive 2009/28/EC on the promotion of the use of energy from renewable sources asks Member States to deﬁne rules and obligations in this ﬁeld regarding new and renovated buildings. In Italy, a national law establishes that 35% of energy needs should be covered by renewables (Legislative Decree 28/2011, art. 11), but some regional legislation (in Calabria, Campania or Lazio, for example) does not clearly state who is responsible for certifying a building's energy performance, so building works may be authorized without checking whether or not the mandatory minimum requirements have actually been met. 14 See Tham and Muneer (2013), among others.
groups should be allowed to operate their power systems separately (Lowi and Crews, 2003). So far, each country has been legislating on these matters in different ways. In Italy, the so-called efﬁcient user systems – Sistemi Efﬁcienti di Utenza (SEU) – are deﬁned in Legislative Decree 115/2008 as renewable power (or high-efﬁciency combined heat and power) systems where electricity is generated and consumed locally, with no obligation to be connected to the national grid. In medium-sized residential buildings or shopping malls, this conﬁguration may be technically appropriate and economically interesting due to the considerable ﬁscal beneﬁts gained by reducing the self-consumption levy. Unfortunately, the current formulation of the Italian law (see Decision 578/2013/R/eel, Annex A of the Italian Regulatory Authority for Electricity Gas and Water) calls for a direct power purchase agreement, which means there must be a direct physical connection between the local power plant and the consumer point. This makes it, de facto, impossible to adopt this system if users each receive their own separate bills (as is usually the case for households in a block of ﬂats, or stores in a mall). The fourth measure involves simplifying the compliance procedures (the issue of permits, inspection processes, and so on), which still account for a signiﬁcant part of the costs associated with the installation of micro power plants in many countries (Pitt, 2008; Crousillat et al., 2010; Outka, 2011; Newcomb et al., 2013). The ﬁfth measure concerns the provision of incentives and tax cuts. It is crucially important to do so without excessively distorting market dynamics, however, and one way to achieve this is to avoid “asymmetrical” schemes. Incentives should be as “neutral” as possible, rather than motivating or demotivating the choice of very speciﬁc activities or commodities. Asymmetrical taxes and incentives interfere with the rational allocation of resources and capital to the most productive and efﬁcient endeavors (Smith, 2009; Allison, 2013). Examples of such non-neutral (asymmetrical) schemes that have failed in their aim include certain home-ownership deductions, farm subsidies, and ethanol subsidies (Allison, 2013; Gjerstad and Smith, 2014). In the case in point, incentives or tax rebates should be introduced not for speciﬁc technologies (e.g. photovoltaic systems, as happened in Italy15), but for any technology that reduces the need for grid-related public spending (e.g. for power line extensions, user connections, etc.) or that contain negative externalities (Brunetta and Moroni, 2011). In addition to establishing appropriate rules and incentives,16 the institutional framework must grant legal certainty over time for both private users and investors. In Italy, the above-mentioned feed-in tariff was changed ﬁve times in eight years, and often in unexpected ways. It was the European Renewable Energy Federation (EREF, 2013: 17) that made the point that, “One of the main principles in policy making should be to avoid retrospective changes all together … They destroy investment security and increase the cost of capital thus leading to an artiﬁcially higher cost 15 From 2005 to 2013, a very attractive 20-year feed-in tariff offered by the Italian “Conto Energia” law (the ﬁrst version of which was contained in a Ministerial Decree of 28 February 2005) prompted an unexpected massive diffusion of photovoltaic systems. In this particular case, the lack of speciﬁc rules governing photovoltaic installations combined with the lack of any ex-ante assessment of the effects of the incentives led to an extensive land occupation for new PV systems, mainly in rural areas. 16 Clearly, it has been possible to make here only some quite general considerations. A more detailed analysis would involve considering the various regulatory and administrative barriers existing in different countries in more depth, and making more contextualized proposals for reform. Interesting efforts to do so have been made by Bronin (2010), Farrell (2011, 2012 and, 2014), and Salkin (2012), with reference to the United States, and by Barton et al. (2015) and Chmutina and Goodier (2014), concerning Great Britain; with reference to Australia, see Byrnes et al. (2013).
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of renewable energy technologies and therefore making the transition towards green energy more expensive”.17
5. Conclusion and policy implications Three main conclusions can be drawn from our analysis and discussion. First, the transition from fossil fuel burning to distributed renewable energy systems demands both a diffusion of the available technology and a favorable institutional framework.18 To date, “regulatory and institutional barriers stemming from utilities’ dominant industry position have made onsite energy a signiﬁcantly underutilized energy” (Outka, 2011: 302). The transition to renewable resources does not necessarily imply taking up more land – quite the opposite, providing the institutional framework favors the development of a decentralized, distributed energy system, enabling the systematic integration of small-scale equipment in buildings. Second, when comparing the two systems – centralized versus decentralized – it is important to bear in mind that the centralized power systems currently used, even in many developed countries, require massive investments for their upgrading (also considering the costs of acquiring land for new lines and substations, and the costs of their installation). Dealing with the problem of power outages alone would demand huge investments (Bruch et al., 2011). So it is not a matter of comparing one system (the traditional centralized one) that works perfectly as it is, with no need for any further development and investment, with another (decentralized) system that has yet to be conceived. The question is rather about which way we should go, because any choice implies challenges, commitment and investments.19 Third, it is important to stress that the polycentric scenario considered here is characterized by nodes that reveal a multilayered density: the nodes are dense primarily in terms of the physical structures involved; they are also dense in terms of their technological content (for building-related renewable energy systems and micro-grids); and they are dense in the sense of the organizational issues involved (e.g. economic agreements, legal vehicles, etc.). Structural development, technological innovation, and organizational setup are therefore closely connected and concentrated in this type of node. Thinking in terms of this multilayered density of distributed energy systems represents an 17 Policy makers should also bear in mind how new legislation concerning emerging technologies may affect existing decentralized systems too. A recent example comes from the latest revision of the “CEI 0-21” norm (December 2014), a technical reference ruling of the Italian Electrotechnical Committee on the connection of active or passive users to low-voltage power networks. This norm calls for DC-to-AC power inverters for the delivery of grid services, hampering the installation of small storage systems. The extra cost of such power inverters, coupled with a paucity of such products on the market, is likely to discourage the upgrading of domestic renewable plants. 18 A recent Swiss study analyzed more than ﬁfty-ﬁve international utility business models for distributed renewable energy generation, showing that the focus is currently on “operation and control of third party owned infrastructures and on customized services” (Facchinetti and Sulzer, 2016: 10). Other options have been less thoroughly explored, due mainly to an unfavorable, insufﬁciently ﬂexible regulatory framework (ibid.: 11). 19 The cost of maintaining and extending the public centralized grid is more evident in countries with a large demand from rural communities. The electriﬁcation of rural areas based on the traditional central production and distribution model is clearly more expensive because of lower capacity utilization rates, lower load densities, higher line losses, and ordinary and extraordinary infrastructure maintenance (Munuswamy et al., 2011). In rural parts of India, the average cost per kilometer of extending the grid was estimated in 2011 at $8000– 10,000 (and the ﬁgure rose to $22,000 in difﬁcult terrains). These costs are seven to ten times higher than in urban areas – and 92% of the Indian population without electricity live in rural areas, which means 380 million people ibid.: 2979.
original theoretical framework for combining and interpreting apparently diverse and independent aspects in a unifying schema. Density leads here to a resilient system that cannot be deﬁned in advance, neither in quantitative terms of supply and demand, nor as regards its spatial conﬁguration: the whole system stems from a bottom-up development as the nodes evolve. This theoretical approach deserves further, more in-depth analysis based on both empirical evidence and comparative studies, with a view to providing the grounds for future research in this ﬁeld.
Acknowledgments This research did not receive any speciﬁc grant from funding agencies in the public, commercial, or not-for-proﬁt sectors.
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