Why social innovation is key to a fair energy transition

In response to the commitment made in Paris of limiting global temperature increases to the 1.5°C threshold, the European Commission (EC) has outlined a vision to achieving net-zero greenhouse gas emissions by 2050 through a socially-fair transition. Being responsible for more than 73% of the EU’s GHG emissions, the energy sector plays a central role in helping slow climate change.

The first step by the EC was to make significant changes to the energy regulatory framework. In December 2018, the EC revised the Energy Efficiency Directive and the Renewable Energy Directive and set overall EU target for 2030 to at least 32.5% and 32% respectively (relative to the 2007 modelling projections for 2030). The amended energy performance of buildings directive sets out roadmaps with indicative milestones for 2030, 2040 and 2050 and long-term strategies for Member States to support the renovation of the national stock of residential and non-residential buildings. In October 2020, the EC published the new renovation wave strategy which aims to double annual energy renovation rates in the next ten years.

Innovation is of course a key enabler of the transition. Action is required on several fronts, from scaling clean-energy technologies and energy efficiency solutions that are market-ready immediately to bring about new solutions not yet mature or even known to the market – hydrogen being one example. As the WEF puts it, achieving the 2050 target requires “nothing short of an innovation tsunami”.

Overall, a trajectory compatible with net-zero greenhouse gas emissions is expected to have an overall positive impact on GDP with estimated benefits of up to 2% of GDP by 2050 compared to the baseline. However, the transition towards climate-neutrality cannot be achieved through technology alone (EC, 2018). Indeed, while society as a whole will gain from the transition to decarbonisation, the benefits will not be distributed equally. Moreover, short-term trade-offs will naturally spark opposition from groups concerned that change might hurt them, as was well demonstrated during the Yellow Vests Movement in France.

In a nutshell, new technologies and models have the potential to increase social and regional disparities in the EU as well as de-railing decarbonisation efforts.

Moving towards a net-zero greenhouse gas economy can only be successful with citizens that embrace change, get engaged and experience it as beneficial for their lives. Empowering and involving citizen-consumers and communities will be thus key to unlocking its full potential.

Innovative social approaches (as opposed to for-profit innovation) can offer the mechanisms to support a just transition of existing energy systems (Eichler and Schwarz, 2019), as it often takes place bottom-up, contributing to citizen empowerment and improved collaborations, while grounded in local social needs or goals (Millonen et al, 2020).

Social innovations in the energy sector are already happening throughout Europe, primarily driven by the shift from centralised power generation and distribution to one where facilities are more widely distributed and control is potentially shared on platforms where ‘prosumers’ can also participate (DG Research). Also, the massive scale of the Renovation Wave is an added opportunity to not only achieve energy-efficient buildings but more comfortable homes for all Europeans, as a part of the just and social green transition.

District-level approaches are gaining momentum across Europe and have shown how social innovation in the energy sector can affect communities positively. Given the immediate results of technology transformation, these approaches can demonstrate the benefits of transitioning (HousingEurope). The number of cases increases by the day. The following are some of the most positive examples:

    • VVH is tackling energy poverty through collective access to renewable energy (Aster Project). The planned investment involved the installation of approx. 20.000 Photovoltaic (PV) panels in social housing units. ASTER’s work aims at benefiting all tenants by sharing produced energy and its financial rewards (HousingEurope).
    • The Energiesprong is a unique approach to retrofitting buildings to net-zero energy in social housing. The renovation is financed by future energy cost savings over the coming 30 years plus the budget for planned maintenance and repairs, ensuring no extra costs are passed to the tenants.
    • The Dutch Starter Engine project aims to connect homes to a collective heat system and keep the heat supply affordable as part of the national commitment to be disconnected from the gas grid.

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