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Incumbent lobbying as a barrier to forward-looking regulation: The case of demand-side response in the GB capacity market for electricity

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  • Lockwood, Matthew
  • Mitchell, Catherine
  • Hoggett, Richard

Abstract

The current transformation of energy systems around the world is fundamentally a policy-driven process, unlike previous socio-technical transitions. This article focuses on the challenges of constructing forward-looking policies for sustainable energy transitions in the presence of powerful incumbent interests, through an in-depth study of how the emerging option of demand-side response (DSR) was incorporated into the Capacity Market (CM) for electricity in Great Britain over the period 2010 to 2014. Drawing on extensive documentation related to the development of the CM rules and interviews with participants and close observers of the process, the paper provides an unusually detailed assessment of the influence of companies with large electricity generation assets. The evidence presented supports the hypotheses that these companies had influence through deploying public facing strategies, that they had been able to draw on close networks of contacts and networks with senior policy makers, and that the latter had internalised the ideas and interests of the former. Despite counter-lobbying by DSR firms and non-governmental organisations, institutional arrangements gave major generators an advantage in terms of access. The paper concludes by recommending the establishment of independent bodies to propose policies and monitor the process of their development during energy system transformations.

Suggested Citation

  • Lockwood, Matthew & Mitchell, Catherine & Hoggett, Richard, 2020. "Incumbent lobbying as a barrier to forward-looking regulation: The case of demand-side response in the GB capacity market for electricity," Energy Policy, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:enepol:v:140:y:2020:i:c:s0301421520301798
    DOI: 10.1016/j.enpol.2020.111426
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    3. Annala, Salla & Ruggiero, Salvatore & Kangas, Hanna-Liisa & Honkapuro, Samuli & Ohrling, Tiina, 2022. "Impact of home market on business development and internationalization of demand response firms," Energy, Elsevier, vol. 242(C).
    4. Lu, Xiaoxing & Li, Kangping & Xu, Hanchen & Wang, Fei & Zhou, Zhenyu & Zhang, Yagang, 2020. "Fundamentals and business model for resource aggregator of demand response in electricity markets," Energy, Elsevier, vol. 204(C).
    5. Natalia Wasilewska & Mirosław Wasilewski & Serhiy Zabolotnyy & Dmytro Osiichuk, 2022. "The Impact of M&As on the Competitive Positioning of European Energy Firms and Market Power Concentration on EU National Energy Markets," Energies, MDPI, vol. 15(23), pages 1-19, November.
    6. Golmohamadi, Hessam, 2022. "Demand-side management in industrial sector: A review of heavy industries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    7. Yilun Luo & Esmaeil Ahmadi & Benjamin C. McLellan & Tetsuo Tezuka, 2022. "Will Capacity Mechanisms Conflict with Carbon Pricing?," Energies, MDPI, vol. 15(24), pages 1-25, December.

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