Transforming the Electricity Grid: From Centralized Monocultures to a Polycentric Ecosystem

The electricity supply system faces major challenges. The physical and social vulnerability of the monoculture of hierarchical, centralized systems urgently requires radical transformation of their organizational structures as well as their infrastructures. These transformations to low carbon are often characterized as ‘decentralization’. However, decentralization is a process that only signifies a move away from centralized models. This does not necessarily result in a decentralized architecture, but rather a model in which the dominance of ‘commercial private’ combined with ‘monopolistic public’ is replaced by cooperation and community. The research question is: what will be the design of future electricity grids after the transformation? The integration of distributed renewable resources and the growing need for resilience requires great diversity and flexibility from socio-technical smart grids. These involve digitization, enabling the transformation of power grids into networks of clustered, self-healing microgrids with distributed energy systems: generation, storage, transmission, demand response, and internal energy management. Several fundamentals of Common Pool Resources theory (Ostrom) on the analysis of sustainable management of natural resources are reviewed on their relevance: the Socio-Ecological System framework, distinct property regimes, the Polycentricity concept, and the Institutional Analysis and Development (IAD) framework. The transformation leads to ‘distributed’ rather than ’decentralized’ models. Governance no longer takes place from a single control point, but from many, spread across multiple levels, similar to ecosystems. End users play a key role and become partly coproducing prosumers. Governance is polycentric rather than decentral. The IAD provides as its most important condition that, at the legislative level, there must be minimum recognition of the right of ‘renewable energy communities’ to organize themselves as microgrids. This is immediately the biggest social acceptance challenge, as the current monoculture incorporates several lock-ins: incumbent powerful actors, centralized hierarchical control legislation, and obstructive market conditions, including taxing systems.