Tyndall˚Centre

for Climate Change Research

The development of large technical systems: implications for hydrogen

Jim Watson

March 2002

Tyndall Centre for Climate Change Research

Working Paper 18

The Development of Large Technical Systems: Implications for Hydrogen

Dr. Jim Watson SPRU – Science and Technology Policy Research University of Sussex, Falmer, East Sussex, BN1 9RF Tel. 01273 873539 Fax. 01273 685865 Email. w.j.watson@sussex.ac.uk

Tyndall Working Paper No. 18 March 2002

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Contents Introduction................................................................................................................................3 Energy Futures Scenarios and Hydrogen...................................................................................3 Aims of Scenarios ..................................................................................................................3 The SPRU/Foresight Scenarios .............................................................................................4 Foresight Fuelling the Future Scenarios ................................................................................5 PIU Energy Scenarios to 2050...............................................................................................5 Royal Commission on Environmental Pollution Scenarios to 2050......................................6 Shell Scenarios to 2050..........................................................................................................7 Overall Implications...............................................................................................................8 The Development of New Technical Systems...........................................................................9 Why are Systems Important ? ................................................................................................9 Lessons from the Electricity Industry ..................................................................................10 Some General Lessons.........................................................................................................11 Conclusions - How do we Enable Transitions ? ......................................................................13 Next Steps ................................................................................................................................14

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Introduction Hydrogen has the potential to transform the UK energy system – away from its present state of fossil-fuel dependence towards a cleaner low-carbon future. In abstract, it is possible to imagine a new hydrogen energy economy1 in which hydrogen is generated, transported, stored and made available for use in homes, businesses and for transport. However, despite the hyperbole about the potential for hydrogen and its desirability2, this hydrogen energy economy is not inevitable. The gap between where we are now and this abstract future is substantial. Furthermore, the transition path to an energy system with hydrogen at its core is fraught with uncertainty. The purpose of this short briefing paper is to stimulate thinking and debate about possible transition paths to hydrogen use on a large scale, and the likelihood that this transition will actually happen. It begins by setting out some key messages for hydrogen from a number of recent scenario exercises that have focused on the future of energy systems to 2050. The paper then proceeds to analyse some existing work on the nature of large technical systems such as the electricity supply industry, and the way in which they are financed and developed. The paper concludes with some pointers for policy makers and firms wishing to facilitate and implement the transition to a less carbon-intensive energy system. Energy Futures Scenarios and Hydrogen Aims of Scenarios For the analysis of longer-term developments in the energy system such as the possible move to hydrogen, conventional forecasting techniques are severely limited. Whilst these techniques are a useful tool for analysing trends over the short to medium term, the results of forecasts for periods longer than a decade into the future are often unsatisfactory. As a result, there is an increasing trend towards the use of scenario techniques to explore the uncertainties inherent in longer-term explorations of the future. Scenarios are one way in which both governments and companies have sought to test the robustness of current decisions by developing a range of possible futures. The aim is to identify how likely it is that a particular development (in this case, the shift to a hydrogen economy) will happen, and to identify some common trends that are important for this development across a wide range of scenarios. Shell International, one of the pioneering developers of scenario approaches explains the value of their work as follows: ‘Scenarios are a tool for helping managers plan for the future – or rather for different possible futures. They help us focus on critical uncertainties. On the things we don't know about which might transform our business. And on the things we do know about in which there might be unexpected discontinuities. They help us understand the limitations of our ‘mental maps’ of the world – to think the unthinkable, anticipate the unknowable and utilise both to make better strategic decisions’3. This section of the paper examines a range of recent long-term scenario exercises which have been carried out by public and private organisations, most of which look forward to 2050, and analyses the conditions they identify for a shift to the large-scale use of hydrogen.

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The SPRU/Foresight Scenarios These scenarios were originally developed by SPRU, University of Sussex for the UK government Foresight Programme4 and have subsequently been used in projects for other government departments. Energy-specific applications of these scenarios have included the Fuelling the Future study by the Foresight Energy and Natural Environment Panel. More recently, the SPRU scenarios have also been employed by the Cabinet Office Performance and Innovation Unit (PIU). As part of its enquiry into UK energy policy, the PIU has produced its own results from the basic SPRU framework for the UK energy system in 2020 and 2050. More details of these two applications are given below. The starting point for the SPRU scenarios is the construction of logical and consistent 'storylines' about the future. These storylines can be applied at a number of different levels from sub-national to global. The scenario construction assumes that the whole world is subject to the forces described within them. This is no more or less realistic than the assumption that any one country will conform strictly to any one scenario over time. The SPRU scenarios are developed from two main variables or dimensions of a largely qualitative nature. The first dimension is values (individuals/consumers vs. community) and the second is governance (autonomy vs. interdependence). This means that technology is not viewed as autonomous and following its own independent path. It is rather viewed as mainly the product of the combination of dominant values and governance systems being explored. This allows the degree of success of different technologies and systems to vary according to different scenario circumstances. When the two dimensions of the SPRU scenarios are combined, they suggest four possible future states (see Figure 1).
Figure 1 – The SPRU Contextual Futures Scenarios
GLOBALISATION

WORLD MARKETS

GLOBAL SUSTAINABILITY

CONSUMERSISM

CONVENTIONAL DEVELOPMENT

COMMUNITY

PROVINCIAL ENTERPRISE

LOCAL STEWARDSHIP

REGIONALISATION

These four scenarios can be characterised as follows: • • World Markets. This combines emphasis on the individual and consumer with a highly interdependent governance structure. This world is dominated by private consumption and a highly developed and integrated trading system Provincial Enterprise. Here a similar emphasis on private consumption is combined with a more fragmented governance system which emphasises more local-level and variable decision processes, emphasising national and regional decision-making

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Global Sustainability. This combines social and ecological values with a more interdependent and collective governance structure, producing a strong world regime interested in dealing with environmental issues. Local Stewardship. In this scenario, the governance structure is fragmented, as in provincial enterprise, but predominant values emphasise the social and to a degree ecological, rather than consumers and individuals.

Foresight Fuelling the Future Scenarios One of the most recent energy-specific applications of the SPRU/Foresight scenarios was the work of the Energy Futures Task Force of the Foresight Energy and Natural Environment Panel. Their Fuelling the Future exercise used these scenarios to develop a view of the UK’s priorities in energy research and development (R&D) to deliver competitive energy sources and infrastructure to 20405. The four SPRU/Foresight scenarios were elaborated to provide a set of possible future patterns of energy supply and use. The R&D priorities implied by each scenario were then set out. Three common R&D themes emerged from this exercise: a need to determine how energy infrastructures can facilitate the expected move to decentralised energy sources, work on the way in which the UK can move away from oil-based transport fuels, and a reexamination of the role of nuclear power and how this option may be kept open. The extent to which hydrogen features as an energy carrier under these scenarios varies considerably: • For World Markets, a possible transition to hydrogen is identified in the very long term. This would initially take place due to the need for alternative transport fuels in urban areas. For Provincial Enterprise, there is no explicit role for hydrogen. This is a protectionist scenario which is largely concerned with maintaining the national status quo, particularly in terms of technology and infrastructure. Under Local Stewardship, there is a possible role for hydrogen implied in investments in small scale fuel-cell energy systems in households and for transport. Under Global Sustainability, there is a strong shift in favour of hydrogen after 2030. It emerges as an energy carrier for stationary and transport uses. Considerable public and private investment is expected to facilitate the installation of a hydrogen network.

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PIU Energy Scenarios to 2050 A more recent and broader application of the SPRU/Foresight scenarios to the UK energy system was undertaken by the Cabinet Office Performance and Innovation Unit (PIU). This particular scenario exercise was carried out as part of the PIU Energy Review6, a strategic assessment of energy issues for the UK for the next fifty years. The results of the Review, including the scenario exercises that informed it were published in February 2002. The PIU’s deliberations included the development of scenarios for the UK energy system in 2020 and 2050. Due to the consensus about the likely timescales for its use on a large scale,

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hydrogen only emerges under the longer-term 2050 scenarios. The overall assessment of hydrogen’s potential role within the 2050 scenarios is mixed: ‘Hydrogen is the vector with the most potential for radical change to the energy system. The implications for both the environment and energy security depend on the source of the hydrogen – the benefits are most significant if it is manufactured from sustainable sources, probably renewable electricity. Its deployment by 2050 is likely to depend upon both technical developments (fuel cells and finding low cost methods of storing hydrogen) and the development of a national infrastructure. In the past, large-scale distribution infrastructures have been constructed by monopolies or public bodies; it is not clear how a hydrogen infrastructure would be constructed in any of the scenarios examined.’7 The most important message within this assessment is that it is not clear how the necessary hydrogen infrastructure will be developed and financed under any of the four scenarios considered. As a result, the PIU consider that ‘a transition to hydrogen is … unlikely to be completed by 2050’8. This assessment may seem to identify a fundamental barrier to a shift to an all-embracing hydrogen energy economy. However, as the analysis later in this paper will show, it is likely that the introduction of hydrogen on whatever scale will be accompanied by a rather chaotic development of infrastructure rather than an ordered and well directed replacement of current infrastructures. Royal Commission on Environmental Pollution Scenarios to 2050 The Cabinet Office Energy Review was partly set up in response to a report from the Royal Commission on Environmental Pollution (RCEP) in June 2000. The report, Energy – The Changing Climate9, recommended that the UK need to reduce its carbon emissions by 60% over the next fifty years. To show a range of different ways to make this reduction, the RCEP developed its own set of scenarios. The RCEP scenarios differ significantly to those developed by SPRU for the Foresight process since they are largely quantitative and prescriptive in nature. By varying key factors such as the assumed energy demand, the use of renewable energy sources and the role of nuclear and fossil fuel power stations, four ways of achieving a 60% reduction in carbon dioxide emissions by 2050 were analysed. The key features of the four RCEP scenarios are: • Scenario 1: No increase on 1998 energy demand by 2050, a combination of renewables and either nuclear power stations or large fossil fuel power stations at which carbon dioxide is recovered and disposed of. Scenario 2: Demand reductions, renewables, with no nuclear power stations or routine use of large fossil fuel power stations. Scenario 3: Demand reductions and a combination of renewables and either nuclear power stations or large fossil fuel power stations at which carbon dioxide is recovered and disposed of. Scenario 4: Very large demand reductions, renewables with no nuclear power stations or routine use of large fossil fuel power stations10.

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Despite the emphasis placed on radical expansions of renewable energy and deep reductions in energy demand under some of these scenarios, there is no expectation that a more radical 6

shift to a hydrogen economy will be achieved. Hydrogen exclusively features as a new transport energy carrier under scenarios 1, 2 and 3 since the RCEP expects fuel cells to have largely replaced conventional petrol and diesel engines. Interestingly, they also expect that the hydrogen used for this purpose would be produced from oil and gas rather than renewable energy sources. Shell Scenarios to 2050 Shell International has a long-established competence in the exploration of energy scenarios for the long term future which dates back to the early 1970s. One of the company’s most recent scenario exercises focus on 2050, and was published in 2001. It contrasts two possible futures for 205011 in the light of three key drivers for change – resource scarcity, technical change, and personal and social priorities. The first of these scenarios is termed Dynamics as Usual. This scenario is a kind of ‘business as usual’ case since it assumes that historical patterns of fuel substitution will continue. The shift from coal to gas in the 20th century will be succeeded by an equally significant shift to renewable energy sources (or possibly nuclear power) in the 21st. As a result, hydrogen does not feature in this scenario. Some of the other trends embodied in this scenario include: • • • • • A prolonged life for the internal combustion engine since there is no enthusiasm amongst consumers for fuel cells. Gas is the dominant fuel for electricity generation. Its share of global primary energy overtakes coal by 2010 and challenges oil by 2020. Renewable energy sources experience a boom and bust problem. Government targets drive expansion, but this stagnates due to planning problems, high costs etc. A key decision point reached in 2025 since no dominant energy choice emerges from a complex mix. Choice between a nuclear renaissance and a return to renewables. Oil scarcity by 2040 forces the pace of a second wave of renewables, led by thin film solar PV technology for stationary power and biofuels for transport.

The second scenario is entitled The Spirit of the Coming Age. This scenario is radically different – it embodies the possibility of a discontinuity in the evolution of energy systems in the future. This occurs during a period of experimentation and innovation which results in a new portable hydrogen ‘boxed fuel’ which consumers find convenient. The basic idea is that this boxed fuel will engender a far reaching energy revolution in the same way that the concepts that spawned the Sony Walkman revolutionised personal communication and entertainment. This revolution takes place along the following lines: • • • Fuel cells are initially taken up by businesses needing uninterruptible sources of power. This early demand feeds back into falling unit costs. By 2025, 25% of OECD vehicles use fuel cells. Soon after this date, China leapfrogs industrialised countries to embrace this technology. The demand for hydrogen for these fuel cells gives rise to increasing incentives for an extensive hydrogen infrastructure. Oil goes into decline before scarcity becomes an issue.

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The hydrogen is initially produced from fossil fuels with carbon sequestration, but later generated by nuclear and large-scale renewables.

Overall Implications As expected, none of these scenarios produce a firm conclusion about the feasibility or inevitability of a transition to a hydrogen-driven energy system. However, their different approaches and results highlight a number of important issues for this paper. First, and perhaps most important, the scenarios provide a ‘reality check’ for hydrogen enthusiasts. In many discussions of hydrogen’s potential, it is assumed that its time will come – the main questions for debate and action are when and how. Shell’s Dynamics as Usual scenario is a useful reminder that hydrogen is not an inevitable part of our future despite challenges of supply security and environmental protection. Other scenarios show that even if hydrogen does become a significant part of energy systems, it might not completely replace existing energy carriers. In short, the hydrogen energy economy as conceptualised by some futurologists may never become a reality. A second result from the various scenario exercises surveyed here is the broad agreement that hydrogen will initially become important as an energy carrier for the transport sector. Whilst this expectation may partly stem from the focus of current research activities (both public and private), it also suggests a starting point for a long-term shift which might eventually embrace other parts of the energy system. A third result from the scenarios challenges another conventional wisdom amongst hydrogen proponents. It is sometimes assumed that hydrogen must be produced from renewable energy sources to avoid carbon emissions, but this is not necessarily the case. Despite uncertainties and unease about nuclear power and carbon sequestration from fossil fuel burning, both of these options feature in the scenarios as a possible route for hydrogen production. A final issue that emerges is that addressed explicitly by the PIU: How will the new infrastructure required to transport hydrogen from production sites to users be financed and constructed ? Shell’s Spirit of the Coming Age scenario suggests that this question may not be as fundamental as it seems. If hydrogen is introduced through a series of market niches, an integrated infrastructure to distribute it may grow organically, piece by piece. The second part of this paper explores this issue of infrastructure development in more detail by analysing the characteristics of large technical systems. It focuses on the development of one such system which is an important part of today’s energy infrastructure – the electricity grid. By analysing past developments such as the construction of the first electricity grids, we may find lessons that can inform current discussions about the possible transition to hydrogen.

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The Development of New Technical Systems Why are Systems Important ? The study of large technical systems has become increasingly important during the past two decades12. These systems – which include air traffic control, electricity supply industries and rail networks - tend to consist of a complex network of new and old technologies, bespoke equipment and organisational relationships. Large technical systems are singled out as a distinct category since they have unique characteristics. According to Thomas Hughes, a pioneer in this area, they have three distinct features13: • • • A set of components which can be both technical (e.g. power stations, transmissions lines) and non-technical (distribution companies, environmental laws) A set of horizontal and vertical interconnections between the components. This means that changes in one component often lead to changes in others. A control component that sets out the way in which the economic and wider social performance of the system is regulated. Control is exercised by management and economic systems (e.g. wholesale power markets), technical systems (e.g. control technologies) and regulatory systems (e.g. through regulators such as OFGEM).

These features have far reaching consequences for the operation and development of the system. These consequences are particularly important for those wishing to make radical changes to current technical systems – in our case, those seeking to shift the UK energy system towards the use of hydrogen as its primary energy carrier. As Thomas Hughes points out, achieving such a radical shift is not merely a technical challenge. It also faces considerable opposition if it challenges the institutional and organisational arrangements of the current system: ‘Large scale technology, such as electric light and power systems, incorporate not only technical and physical things such as generators, transformers and high-voltage transmission lines, but also utility companies, electrical manufacturers and reinforcing institutions such as regulatory agencies and laws … Large technological systems represent powerful vested interests … Numerous persons develop specialised skills and acquire specialised knowledge appropriate for the system of which they are part … [They] construct a bulwark of organisational structures, ideological commitments, and political power to protect themselves and the systems’14 The hydrogen energy economy as it is usually conceived represents a direct challenge to the current energy system. It calls for new technologies and infrastructures, and also new relationships between energy suppliers and consumers (e.g. through the expected deployment of fuel cell heat and power systems), new firms to supply equipment, new modes of energy service delivery and new challenges for government regulation. Faced with this wide ranging list of potential barriers, a transition to the mass use of hydrogen seems to be an enormous challenge. One way of thinking about this challenge is to look at the development of the systems we have now. There are many existing examples of large technical systems that deliver telecommunications, information technology, energy, air

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traffic control and other services. All of these systems were born out of humble beginnings. By studying their development, strategies can be developed for fostering transitions to new systems in the future. Lessons from the Electricity Industry Since it is one of the key elements of the modern energy economy, the electricity supply industry might provide an important case study to aid the analysis of possible transitions to a hydrogen-based energy system. Whilst modern electricity industries are highly integrated with large numbers of co-ordinated components and organisations, this current state is the result of decades of system development – some carefully planned and some extremely chaotic. Chaos is a particularly apt description of the early years of the electricity industries of many countries. Central planning and control were almost totally absent from a nascent industry that was driven by the ambitions of personalities such as Thomas Edison, George Westinghouse and Elihu Thomson. All were ‘heterogeneous engineers’15 – engineers who brought together the necessary technical components, finance and organisational backing to establish the first electricity systems. In one of the earliest developments, Thomas Edison founded the Edison Electric Light Company in 1878 to provide funds for his research. A year later, the first results came the successful demonstration of sixty electric lamps in the grounds of Edison’s laboratory in New Jersey, USA. What gave Edison the edge over other inventors such as Joseph Swan in England was the speed with which he applied for patents for his designs as well as access to capital from bankers such as JP Morgan16. Early interest in Edison and Swan’s new inventions was largely confined to the wealthy and to municipal governments. Since electric lighting was far more expensive than gas lighting, there was no economic rationale for switching to electricity. However, the novelty value and the prestige associated with having the latest technology on display persuaded theatres, opera houses and some local councils to start building private electric lighting networks17. Economic logic only asserted itself later with the drive for further growth of systems to power electric motors in industry. This heralded the beginnings of the centralisation we have today. Despite his early technological lead, Edison did not develop the type of electricity system that eventually became the industry standard. George Westinghouse came up with the Alternating Current (AC) electricity system to rival Edison’s Direct Current (DC) system. It is important to observe that both systems had merits. The ‘battle of the systems’ as it became known lasted for several years before AC’s superior long distance transmission performance made Westinghouse the winner18. This battle was far from scientific at times, and involved tactics such as the public execution of several dogs using AC power by a professor in the pay of DC proponents. This way, Westinghouse systems came to be briefly associated with capital punishment in the public imagination. Another dimension of the early chaos in the electricity industry was the battle for control. Despite the victory for AC transmission, there were large numbers of relatively small and mostly private networks. Many operated using different AC frequencies and standards. Furthermore, there were no regulations that forced companies to provide universal services

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and obliged consumers to purchase electricity from licensed providers. If a consumer (e.g. a developer of a new tram system) did not like the terms of supply offered by local electricity companies, they would often construct their own system with dedicated generators and transmission lines19. From the 1920s onwards, the increasing need for load management and the economies of scale offered by advances in steam turbine technology began to feed through to a move to centralisation and standardisation. Entrepreneurs such as Samuel Insull (the head of Commonwealth Edison in Chicago) bought up large numbers of small networks and proceeded to connect them using common frequency and voltage standards20. In the UK, the national grid began to emerge from a patchwork of local companies and networks. Despite these moves to interconnection, it was still exceedingly difficult for governments to take control of the new electricity systems and plan their development in the ‘national interest’. In the USA, the government took an early decision to stay out of the industry and to regulate the terms and prices offered by emerging private networks. In the UK, there was a long running battle between central government, private developers and municipal councils over control and jurisdiction. This battle was not concluded until nationalisation by the postWar Labour administration in 194721. The post War era saw the increasing entrenchment of national electricity industries. Continued innovation and economies of scale in power station technologies reinforced the case for centralisation. State-owned companies such as the CEGB in the UK and Electricite de France were almost matched in size and influence by private utilities in the USA such as Southern California Edison. Regulatory agencies grew in importance, particularly in the USA, as did the companies supplying complex technologies for power generation and transmission. The latter industry was particularly powerful – held together by cartels and increasingly concentrated in a handful of multinationals founded by pioneers such as Edison (General Electric), George Westinghouse and Werner Von Siemens22. The large technical systems that constitute the electricity industries of today incorporate powerful vested technical, corporate and regulatory interests. The extent of these is demonstrated by the difficulty of achieving modest reforms such as re-regulation to end bias against smaller ‘embedded’ generators. For more radical shifts such as the replacement of electricity by hydrogen as the main energy carrier, these vested interests must be tackled or co-opted in some way for the process to be successful. Some General Lessons A brief analysis of the electricity industry as a case study of the development of new technical systems has suggested some lessons that may be applied to the case of hydrogen. Of course, it will be necessary to examine a wide range of case studies to form a definitive set of lessons that can be generalised. Nevertheless, the case of electricity offers some useful pointers: First, the growth of new technical systems is characterised by complexity and, at times, an apparent lack of rationality. These systems are not just a collection of new and old technologies linked together, they also incorporate new regulatory arrangements, new corporations, entrepreneurs and financiers. Taking this argument one stage further, the case of electricity has demonstrated that the reason these system elements come together does not

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depend solely on attractive economics. The first electricity systems were not cost competitive, but were developed anyway due to reasons of novelty, prestige and the preparedness to take risks. The issue of risk leads us onto the second theme – the fact that new system growth is often full of uncertainty. The first section of this paper showed how much uncertainty there is about the role of hydrogen – i.e. about whether or not it has a future, and how it might be introduced. The case of the electricity industry has demonstrated that the role of the State has its limits. Whilst governments can set up new regulatory frameworks and market rules to shape developments, the transition path to a new energy system cannot be predetermined or centrally planned. This transition is likely to be accompanied by many unsuccessful technical experiments as well as corporate and policy failures23. The key challenge for government is to be able to set a framework that makes space for these failures, and openly acknowledges the role of the unknown and unforeseen. Third, the growth of new systems might be a combination of evolution and revolution. A new system might build on the old (e.g. by transporting hydrogen through gas pipelines) but may contain revolutionary elements (e.g. Shell’s notion of a new boxed fuel). The more revolutionary the new system, the more it will have to confront the entrenched position of existing systems24. Furthermore, the threat of a new competing system may provide the incentive for the defenders of the old system to fight back, innovate and reassert its dominance.

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Conclusions - How do we Enable Transitions ? This paper has highlighted just some of the issues implied by a desire to shift to a hydrogen energy economy in the future. Long term scenarios for the energy system give mixed results about the feasibility of this shift and the way it might take place. Lessons from the development of large technical systems in the past – particularly the development of electricity industries – show that the transition to hydrogen will not be ordered, smooth and well planned. However, this does not mean that there is no role for policy makers to shape and encourage the process. In conclusion, it is useful to focus on some of the approaches that point possible ways forward. Innovation within existing technical systems has been studied extensively within the literature. One key concept is the ‘reverse salient’ which is caused by parts of the system that fail to keep up with developments elsewhere. These become the focus for technical and institutional innovation projects that aim to reorient the system in the light of changes in technology, governance or priorities. Examples include the aforementioned efforts to reregulate electricity systems to facilitate the connection of embedded generation and the reorganisation of railway industries25. However, radical system changes or the establishment of new systems might require a different approach. Examples are strategic niche management and transition management, tools that have been developed by a group of academics working in support of Dutch environmental policy. According to Rene Kemp and his colleagues, the first of these approaches has the following objectives: ‘Strategic niche management is the creation, development and controlled phase-out of protected spaces for the development and use of promising technologies by means of experimentation, with the aim of (1) learning about the desirability of the new technology and (2) enhancing the further development and the rate of application of the new technology’26 Its proponents argue that strategic niche management is fundamentally different from other tools for the support of more sustainable technologies. First, it is not a government-led exercise in pushing technologies that seem to provide the best solution to environmental problems. Instead, the process is led by technology users and incumbent technology producers are sidelined in an attempt to circumvent vested interests. Second, strategic niche management aims to avoid the creation of new technological ‘white elephants’27 by creating a protected space for promising technologies for a time-limited period. During the protected period, the hope is that iterative learning will by promoted amongst users and producers and institutions will be allowed the space to adapt. These general principles are attractive in theory, but they raise many questions in practice. The sidelining of incumbent technology producers appears to be an attempt to emulate many previous innovations that were initiated by outsiders. Examples include the invention of the jet engine by Frank Whittle28 and Thomas Edison’s pioneering work on electricity. The problem with this is that it excludes the possibility of corporate change such as that demonstrated by ABB when it pulled out of large scale power plants in favour of distributed network technologies. A further issue is that someone within government will have to approve the selection of technologies for protected encouragement. This is not necessarily a

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problem, but a characteristic that strategic niche management shares with many other policy approaches. Whilst strategic niche management offers one way of supporting selected technologies that might increase energy system sustainability, transition management is a broader approach that addresses the system as a whole. Two proponents, Rene Kemp and Jan Rotmans, explain their approach as follows: ‘Transition management consists of a deliberate attempt to bring about structural change in a stepwise manner. It does not attempt to achieve a particular transition goal at all cost but tries to utilise existing dynamics and orient these dynamics to transition goals that are chosen by society’29 The main elements of the technique include long term thinking to inform current policy, analysis of different levels of scale, different actors (companies, government agencies etc.) and how they interact, a focus on learning by doing, and the inclusion of a variety of possible technical and organisational options. The possible transition to the hydrogen energy economy is given as an example of the type of systemic change that may benefit from transition management. Like strategic niche management, the philosophy behind transition management appears to be a good one for nurturing systemic changes such as the introduction of hydrogen. However, it is less clear how this concept can be applied in practice. Kemp and Rotmans give the example of the Dutch energy system, and the way in which transition management might facilitate a move to a more low-emission infrastructure. Their case study offers only a preliminary analysis of how this challenge should be addressed. It therefore remains to be seen how transition management can be put into operation as a real policy tool. Next Steps The analysis in this briefing paper is a result of an initial investigation of scenario approaches the large technical systems literature, and approaches to the management of transitions. These aspects of the possible transition to a hydrogen economy will be explored further in Phase II of the project in collaboration with SPRU’s partners at RAL and ITS. Key elements of the work in Phase II include: • • • The selection of a set of existing scenarios which will then be elaborated, and the role of hydrogen quantified. The selection and analysis of a number of other case studies of large technical systems. These case studies will include both contemporary and historical examples. The application of the transition management framework to the case of hydrogen. This will draw on the quantified scenarios, and will identify and analyse alternative development paths for the introduction of hydrogen in the UK in collaboration with representatives from government and industry.

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References
G Dutton Hydrogen Energy Technology Tyndall Centre Project IT1.26, Briefing Paper No.1 (2002). J Leslie ‘Dawn of the Hydrogen Age’ Wired (September 1997). 3 Shell International Energy Needs, Choices and Possibilities: Scenarios to 2050 (2001). 4 Office of Science and Technology Environmental Futures Foresight Programme (March 1999). 5 Energy Futures Task Force Fuelling the Future Foresight (2000). 6 Performance and Innovation Unit The Energy Review Cabinet Office (February 2002) 7 Performance and Innovation Unit Energy Systems in 2050 Energy Review Working Paper, Cabinet Office (2001), p22. 8 Performance and Innovation Unit The Energy Review Cabinet Office (February 2002), p90. 9 Royal Commission on Environmental Pollution Energy – The Changing Climate Report to Parliament, CM4749 (June 2000). 10 Taken from Royal Commission on Environmental Pollution op. cit. p173. 11 Shell International op. cit. 12 Thomas P Hughes Networks of Power: Electrification in Western Society, 1880–1930 Johns Hopkins University Press (1983). 13 Thomas P Hughes op. cit., elaborated in Anton Geyer and Andrew Davies ‘Managing project–system interfaces: case studies of railway projects in restructured UK and German markets’ Research Policy 29 (2000) pp991-1013. 14 Thomas P Hughes American Genesis Viking (1989) p459. 15 John Law ‘Technology and Heterogeneous Engineering: the Case of Portuguese Expansion’ in WE Bijker, TP Hughes and T Pinch (eds) The Social Construction of Technological Systems MIT Press (1987), p113. 16 Walt Patterson Transforming Electricity Earthscan (1999), p39. 17 Walt Patterson op. cit. 18 M Josephson, Edison: A Biography, Eyre and Spottiswoode (1961). 19 Walt Patterson op. cit. 20 Thomas P Hughes American Genesis Viking (1989). 21 Walt Patterson op. cit. 22 WJ Watson Constructing Success in the Electric Power Industry: Combined Cycle Gas Turbines and Fluidised Beds DPhil Thesis, University of Sussex (1997) esp. Chapter 7. 23 Joseph Schumpeter Capitalism, Socialism and Democracy Harper (1975) pp82-85. 24 See for example, W Walker ‘Entrapment in Large Technology Systems: Institutional Commitment and Power Relations’ Research Policy 29 (2000) pp833-846. 25 Anton Geyer and Andrew Davies, op. cit. 26 R Kemp, J Schot and R Hoogma ‘Regime Shifts to Sustainability through Processes of Niche Formation: The Approach of Strategic Niche Management’ Technology Analysis and Strategic Management Vol.10 No.2 (1998) p175. 27 O Keck ‘A Theory of White Elephants: Asymmetric Information in Government Support for Technology’ Research Policy Vol. 17 (1988) p187. 28 EW Constant The Origins of the Turbojet Revolution Johns Hopkins University Press (1980). 29 Rene Kemp and Jan Rotmans ‘The Management of the Co-evolution of Technical, Environmental and Social Systems’ Conference Paper for Towards Environmental Innovation Systems Garmisch-Partenkirchen (27-29 Sep 2001).
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The inter-disciplinary Tyndall Centre for Climate Change Research undertakes integrated research into the long-term consequences of climate change for society and into the development of sustainable responses that governments, business-leaders and decisionmakers can evaluate and implement. Achieving these objectives brings together UK climate scientists, social scientists, engineers and economists in a unique collaborative research effort. Research at the Tyndall Centre is organised into four research themes that collectively contribute to all aspects of the climate change issue: Integrating Frameworks; Decarbonising Modern Societies; Adapting to Climate Change; and Sustaining the Coastal Zone. All thematic fields address a clear problem posed to society by climate change, and will generate results to guide the strategic development of climate change mitigation and adaptation policies at local, national and global scales. The Tyndall Centre is named after the 19th century UK scientist John Tyndall, who was the first to prove the Earth’s natural greenhouse effect and suggested that slight changes in atmospheric composition could bring about climate variations. In addition, he was committed to improving the quality of science education and knowledge. The Tyndall Centre is a partnership of the following institutions: University of East Anglia UMIST Southampton Oceanography Centre University of Southampton University of Cambridge Centre for Ecology and Hydrology SPRU – Science and Technology Policy Research (University of Sussex) Institute for Transport Studies (University of Leeds) Complex Systems Management Centre (Cranfield University) Energy Research Unit (CLRC Rutherford Appleton Laboratory) The Centre is core funded by the following organisations: Natural Environmental Research Council (NERC) Economic and Social Research Council (ESRC) Engineering and Physical Sciences Research Council (EPSRC) UK Government Department of Trade and Industry (DTI) For more information, visit the Tyndall Centre Web site (www.tyndall.ac.uk) or contact: External Communications Manager Tyndall Centre for Climate Change Research University of East Anglia, Norwich NR4 7TJ, UK Phone: +44 (0) 1603 59 3906; Fax: +44 (0) 1603 59 3901 Email: tyndall@uea.ac.uk

Other titles in the Tyndall Working Paper series include: 1. A country-by-country analysis of past and future warming rates, November 2000 2. Integrated Assessment Models, March 2001 3. Socio-economic futures in climate change impact assessment: using scenarios as ‘learning machines’, July 2001 4. How high are the costs of Kyoto for the US economy?, July 2001 5. The issue of ‘Adverse Effects and the Impacts of Response Measures’ in the UNFCCC, July 2001 6. The identification and evaluation of suitable scenario development methods for the estimation of future probabilities of extreme weather events, July 2001 7. Security and Climate Change, October 2001 8. Social Capital and Climate Change, October 2001 9. Climate Dangers and Atoll Countries, October 2001 10. Burying Carbon under the Sea: An initial Exploration of Public Opinions, December 2001 11. Representing the Integrated Assessment of Climate Change, Adaptation and Mitigation, December 2001 12. The climate regime from The Hague to Marrakech: Saving or sinking the Kyoto Protocol?, December 2001 13. Technological Change, Industry Structure and the Environment, January 2002 14. The Use of Integrated Assessment: An Institutional Analysis Perspective, April 2002 15. Long run technical change in an energy-environment-economy (E3) model for an IA system: A model of Kondratiev waves, April 2002 16. Adaptation to climate change: Setting the Agenda for Development Policy and Research, April 2002 17. Hydrogen energy technology, April 2002 18. The development of large technical systems: implications for hydrogen, March 2002 19. The role of hydrogen in powering road transport, April 2002 20. Reviewing organisational use of scenarios: case study - evaluating UK energy policy options, August 2002 The Tyndall Working Papers are available online at: http://www.tyndall.ac.uk/publications/working_papers/working_papers.shtml