Transformation of infrastructure systems

Socio-technical systems such as electricity infrastructures not only have technical or physical components (such as transmission and distribution lines), but also institutional components (such as regulations on the operation and maintenance of these lines). Historical studies on 'large technical systems' (Hughes, 1983; Kaijser, 2003) have shown the importance of the interconnections between the various technical and non-technical components. Changes in one component often lead to, or require, changes in others.

In almost all industrialised countries electricity provision is vertically organised around central power plants. Electricity is transported through the transmission and distribution network to the consumption points, largely in a one-way direction from central power plants to the consumer. Institutions in large technical systems often reflect such defining technical features. Indeed entire large state bureaucracies have often been built and organised around certain key technologies (Mayntz and Hughes, 1988). Liberalisation and privatisation result in decentralisation of a kind (largely in terms of the number of actors involved), but bureaucratic legacies often remain that serve to sustain centralised electricity systems. These include regulations such as wholesale markets, fiscal regimes or planning rules that are biased towards centralised and large-scale power plants (for UK examples see Watson et al., 2006).

Infrastructure systems are also typically characterised by powerful vested interests. Incumbent players typically seek to maintain the existing system, unsurprisingly. Resistance to change can be explained by various factors. Investors (network operators, for example) want to ensure a sufficient rate of return from their huge long-term capital investments in the electricity infrastructure. Another factor that inhibits radical change is the system-specific knowledge accumulated over time. This includes manufacturing processes or equipment design, organisational knowledge related to the control and management of the system (such as system balancing mechanisms) and individuals' knowledge such as professional skills and experience. The latter leads to another important stabilising factor in existing infrastructural systems: system cultures that reflect the dominant values, beliefs or mindsets within an existing system.

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