Governance for accelerating the energy transition

Technical standards, you might think? Why are these relevant here? With companies like Google, Facebook, and Amazon ruling the digital world, isn’t standard-setting an obsolete activity carried out by aged men with big beards (no pun intended, Auke 😉 ). Nothing is further from the truth than that! I have spent most of my academic career on the topic of technical standards, not only their content, but also the economics and legal dimensions of standards, and over time they have become more and more fascinating. Below I will try to take you along and argue why they are becoming more relevant to society over time, also (and especially) for grand societal challenges, such as sustainability.

While not always very visible from the outside, in many areas, standards are the mechanism through which companies and other stakeholders negotiate the future shape of technology. Often, these standards determine the winners and the losers for the next generation, so companies often send their very best engineers and strategists to develop such standards, influence their direction, sometimes hoping to get some of their protected (patented) technology in there as well. And why are these standards so important? Because for devices like radio, television, CD, DVD, (mobile) phones, internet, and so on, interoperability is the key to success. Without a device of company A being able to work successfully with that of company B, both devices are worthless.

While this has been the case for markets like telecommunication and consumer electronics for over a hundred years, it is becoming more and more critical in technologies used in the context of societal challenges. Nowadays, we believe that real potential can only be realized if systems are smart and connected. Take, for instance, the Smart Grid. In the past, the electricity grid was dimensioned to generate just enough energy for any foreseeable peak. But energy creation has become greener yet less predictable (solar, wind turbines). And meeting energy consumption expectations is becoming more and more challenging when more and more people, at the same time of the day, plug their electric vehicles into the grid to charge their batteries. The solution is to make the grid smart, to ensure that creation and consumption communicates and negotiates about their conduct. So, technology is needed to have all these devices successfully talking together. We need interoperability. The role of isolated, stand-alone solutions is diminishing.

There are generally two ways to achieve this. One way is to allow a market party to create such interoperability on multiple levels, and entirely monopolize the various market layers. Like Google, Facebook or Amazon. Market entry will be nearly impossible, and one can wonder whether societal interests and private interests of all sorts of actors are satisfied.

The other way is to develop standards together successfully. Where all stakeholders, based on consensus, agree on the technology that allows their devices, activities, and business models to work together, to remove unnecessary barriers to entry and fuel innovation. They can enable innovative solutions to scale up to large systems. Of course, creating successful standards is easier said than done. There may be barriers of all kinds. There may be conflicting interests about the scope of a proposed standard, the boundaries of the systems it connects, its technical features, the locus of control. Hence, many reasons to study within NEON where standards can help reach the ambitions NEON has.

I look forward, in the coming years, together with Sofia and the others involved, to work in cooperation with those in the technical NEON work packages to optimize success and impact!