Adaptive Governance for Energy System Decentralisation: A case study of the National Electricity Market in Eastern Australia

Abstract

This thesis investigates how the role of an adaptive governance framework, adapted from social-ecological transition (SET) theory, could assist in the challenges associated with electricity system decarbonisation and decentralisation through a case study of the National Electricity Market (NEM) in eastern Australia. The NEM is currently undergoing change at the household, distribution and system level due to the rapid uptake of solar PV and increasingly, domestic battery storage. By using a case study of an area where rapid change is happening, the thesis offers insights in the form of a general framework for adaptive governance that could assist policymakers in meeting decarbonisation targets in Great Britain. SET theory suggests that adaptive governance is needed within social-ecological systems (SES) to manage the transformation of a system that is locked-in to an undesirable state. Adaptive governance is achieved by the empowerment of local actors to create local policy, thereby increasing the innovation potential of the local areas to meet the local policy strategy. Policy and innovation are then coordinated to meet an overarching national vision. The NEM is currently experiencing a form of carbon lock-in. While the federal system of government has allowed State initiatives to incentivise the use of DER, a lack of a national vision and coordination of State policy and the innovations stemming from these policies has created challenges in maintaining the functionality of the electricity system. Taking lessons learnt from the NEM case study and SET theory, this thesis suggests an adaptive governance framework that could assist in electricity system decentralisation, through the empowerment of local policy which is coordinated to meet a national vision. This has lessons for GB, in particular, because GB has set a target for net-zero emissions by 2050. Reaching this target requires increasing the use of distributed energy resources (DER). Enabling decentralisation to work in conjunction with the traditional centralised system requires new rules, new regulations, new markets and new institutions. Taking lessons learnt from an energy system that has already undergone this type of change, an alternative approach for GB policymakers is suggested that may assist with the challenge of enabling decentralisation in the GB energy system.