Law for Decentralized Electricity Systems

Abstract

Decentralization describes a process in which there is a shift from a centrally planned, financed and operated energy system to a more diffuse model where these activities are shared between an increasing number of parties. It accordingly plays a key role in democratizing the energy sector and can also contribute to various other goals. For example, decentralization coupled with increased use of renewable energy sources can improve the sustainability of energy systems. However, it also increases their complexity and the likelihood of surprising, unwanted dynamics within them as more consumers operate as producers, financiers and operators in that sphere. Consequently, energy systems become more unpredictable as central producers, distributors and state institutions have less control over the dynamics of the system as a whole. Against this background, this chapter analyses decentralized electricity systems through the lens of complexity theory, which is an interdisciplinary field of research that addresses complex systems in which large networks of components and/or agents collectively produce emergent, surprising dynamics. The chapter uses complexity theory to explain decentralized electricity systems as complex systems and to evaluate – using the EU as a case study – whether the EU Clean Energy for All Europeans legislative package adequately addresses the issues that emerge in regulating such a complex system.