Smart grids or smart users? Involving users in developing a low carbon electricity economy Geert P.J. Verbong n , Sjouke Beemsterboer, Frans Sengers School of Innovation Sciences, Eindhoven University of Technology, The Netherlands HIGHLIGHTS c State of the art of smart grids experiments in the Netherlands. c Focus on role and position of users. c Trend is to active involvement of users. c Several barriers have been identified. article info Article history: Received in revised form 26 September 2011 Accepted 3 May 2012 Available online 28 May 2012 Keywords: Smart grids Users Strategic niche management abstract This article analyses practices and perceptions of stakeholders on including users in smart grids experiments in the Netherlands. In-depth interviews have been conducted and smart grid projects have been analysed, using a Strategic Niche Management framework. The analysis shows that there is a clear trend to pay more attention to users in new smart grid projects. However, too much focus on technology and economic incentives can become a barrier. Some institutional barriers have been identified. New innovative business models should be developed to explore different options to involve users. The many pilot and demonstration projects that are taking shape or are being planned offer an excellent opportunity for such an exploration. Learning on the social dimensions of smart grids, and the international exchange of experiences can prevent a premature lock-in in a particular pathway. & 2012 Elsevier Ltd. All rights reserved. 1. Introduction Future developments, such as the large scale introduction of intermittent low carbon energy sources (wind, PV) and new loads (Electric Vehicles, heat pumps) are expected to pose great challenges for the ageing electricity grids in the Netherlands. The simple solution is replacing the old cables and lines with heavier ones, that is, reinforcing the current grid infrastructure. Another solution for upgrading our electrical energy infrastructure is to introduce a more intelligent electricity grid, a ‘smart grid’. Introducing information and communication technologies (ICTs) to the electricity grid, is supposed to add ‘intelligence’ to the grids, hence the name smart grid. Such smart grids offer many advantages: they improve both the physical and economic operation of the electricity system by making it more sustainable and robust, more efficient by reducing losses while at the same time offering economic advantages for all stakeholders. The electricity system is a critical infrastructure for modern society. Therefore, it is not surprising that the promise of smart grids has created a real hype. The EU, the USA and emerging economies like China have taken up the challenge of ‘making the grid smart’; they have set up extensive R&D programs and are testing smart grids in practice. However, there is still great uncer- tainty about how such smart grids will look like. In the past 30 years, the electricity sector has seen a shift from a system dominated by engineers to a more market based system. Recently, the beginning of a transition to a low carbon electricity network has become visible. Such a transition is a difficult and long process. The current system is still struggling with the changes that the liberalization process of the 1990s has intro- duced. This is to some extent due to huge sunk investments in technologies (power plants, cables and lines, transformer stations, etc.). The traditional centralized system where the electricity flows from large power plants through the transmission and distribution networks to the (passive) consumers displays a large inertia. Yet, also belief systems, social networks and capabilities play an important role (Verbong and Geels, 2007). Visions on the future electricity system and the preferred development path differ greatly. They range from the development of a European Super grid to the construction of local, loosely linked micro grids. Because all these pathways are technologically feasible, Contents lists available at SciVerse ScienceDirect journal homepage: www.elsevier.com/locate/enpol Energy Policy 0301-4215/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.enpol.2012.05.003 n Corresponding author. Tel.: þ31 402472698. E-mail address: g.p.j.verbong@tue.nl (G.P.J. Verbong). Energy Policy 52 (2013) 117–125