Energy transition in the EU: the potential

role of the consumer

Sustainability Transitions: Concepts, Issues and Indicators

ENP23806
Sofia van Setten
1048917
Introduction
In the European Union, we are observing many efforts to achieve a profound change towards a more
sustainable society. Our ability to accomplish this transition is still very much unsure. A common
point in literature on sustainable development is that it is essential to aim for a more participatory
and decentralised system.[1] It requires a balanced integration of environmental, social and
economic aspects. However, a lack of incorporation of social sciences has been observed ; through
energy transition this tendency is changing. This paper will focus on part of this change, more
precisely on the actors of the energy transition. Obviously, every citizen of the European Union
consumes energy (electricity, fuel, gas…), and therefore can be called a “consumer”. Even though it
is in number the largest group of actors, the role of consumers has not had enough importance in
energy policy making. One of the reason they have been neglected is that they are at the end of the
chain. However, it has been pointed out that consumer sciences matter as much as the technical
aspects. It is thus relevant to study the following question: What is the role of the consumer in the
energy transition in the European Union?

In a first part, new integrated approaches, systems and technologies supporting the change in the
regime will be described. They are characteristic to the energy transition, and give more freedom
and power to the consumer. In a second part, it will be developed how this shift is leading to the
creation of a new actor: the prosumer. This new role will be explained and it will be made clear how
it can benefit the accomplishment of the energy transition. Finally, different limitations and
weaknesses of the changing role of the consumer will be discussed.

The change in the regime supported by new practices

In the 1980s, environmental awareness started to increase throughout the world. New policies were
created to achieve sustainable goals set at world-wide conferences (from the Rio Conference in 1992
to the COP26 in 2021). This change in the regime allowed niches to develop, to be financed and
more seriously considered. New energy systems, technologies and digital platforms emerged
throughout this shift: the energy transition.[1] We will see how they enabled the empowerment of
the consumer.

Local initiatives
One of the main characteristics of energy transition is a decentralized approach; it is aimed that the
power is no longer concentrated in the government, or in the companies that have the monopoly of
the market. Instead, there is more space and control granted to different types of actors.
Additionally, regional and local institutions are given more power.

Chapter 28 of Agenda 21, from the Rio conference in 1992, clearly emphasizes the important role of
local authorities; hence promoting a decentralized system. Since then, local initiatives for sustainable
development have emerged more and more throughout the European Union, following the adage
‘think globally, act locally’.[2] They are associated with the increase in environmental awareness and
social acceptance of renewable energy. Moreover, local initiatives are driven by increasing
empowerment of the consumer. In most of the literature of different European countries, local
initiatives are associated with the citizen and communities.[3] They are generally initiated by
motivated and visionary individuals. Their motivations vary: energy prices, more control over their
energy supply, energy saving, environmental concerns, energy efficiency, improvement of their
community and the society. Some people are simply not satisfied by the current system.[4]
Likewise, the regional energy strategies are in line with the idea that the energy transition will take
place within the households and in the everyday life. It lays on the principle of participation and
inclusiveness.[5] Therefore, these strategies rely on the consumer too.

It is observed that more effort must be put in the interaction and the relationship with citizens when
implementing new policies and new technologies. They will be the ones implementing them or not.
They are the ‘demand’, and hence influencing the economy much more than currently considered.
Incorporating consumers vision can be more easily achieved within a decentralized system, since
local decision makers are closer to the consumer.

However, the question is whether this change will be in favour of the energy transition.

Nowadays, even though most of the population is aware of environmental issues, only a small part is
truly preoccupied and has a realistic perception of the situation.

That is why, the role of the government and the large institutions is important with regard to
education and to communication about sustainable development. If citizens have more knowledge
and understanding on the main challenges we are facing and potential solutions, they might be more
motivated and willing to act on it. Governments cannot transfer the responsibility to achieve the
energy transition to the consumer without giving them the necessary tools. What’s more, citizens
feeling less concerned might need an extra incentive to fully participate. For example, the
government could act through regulations and/or subsidies.

On the other hand, giving citizens more power and credibility is a driver to participate in the energy
transition. Within the population there are some niches of people or groups that are highly
motivated to change things. By empowering them, the implementation of the energy transition
could become easier. Through local initiatives they are not outsiders anymore, but they have the
freedom to shape the society they are living in.

This movement is supported by the emergence of new technologies and systems. We will discuss the
case of smart-grids.

The smart-grid
Access to electricity is an important factor for the quality of life and the development of a country.
[1] Thus, it is essential to include the electricity market when thinking about energy transition. Even
though we are facing new challenges, the electricity distribution has not really changed in
comparison with the last century.[6] To reach the sustainable targets, new concepts were brought
on the table. ‘Smart-grids’ have recently been introduced in the EU to solve a wide range of
problems such as loss in energy efficiency, CO2 emissions and the excessive use of fossil fuels. This is
achieved by enabling communication through digital platforms, by more monitoring and metering,
and by use of renewable sources.[7] It is aimed to not stick to the model ‘supply follow demand’
anymore, but to balance supply and demand. To do so, the consumer must gain power and become
a main actor in the market. In smart grids, there is much more information the energy consumption
communicated in both ways.

On the one hand, it makes consumers more aware about their level of consumption, which is an
incentive to lower it, both for environmental and economic reasons. On the other hand, they have
more control over their decisions when it comes to choosing technologies (energy-consuming
devices), since more information is available (about their price, their environmental impact, their
reliability…). In addition to transparency, this system aims to be more reliable and offers more
security.[6] On the other side, producers have more information about their consumers and their
consumption patterns. It allows them to adapt the supply and how it is managed.

The smart-meter is one of the technologies that is part of the smart-grid. It gives answers to balance
supply and demand: smart-meters allow more control, better digital communication, and better
analysis and management of the data. Their use has very much increased since 2007. Smart-meters
are devices that measure the energy use in a household. What differentiates them from a regular
meter, is that there is a display that allows the consumer to have access to all the data. Therefore,
the consumption is better known, and it is easier to adapt and interact with. It helps in a financial
aspect by lowering costs and by making accounting easier. It also facilitates for households to
become greener. Again, on the other side, it provides new information and visibility for energy
companies, which enables them to come up with more adapted systems.[8] [9]

In theory, this new approach could be decisive for the energy transition, but the struggle appears
when it comes to implementation.

Implementation
The only way to know whether innovative systems and technologies are a success or a failure is by
implementing them. With regard to the energy transition, it mostly depends on the level of adoption
of the consumer. Usually, a new technology will ‘fail’ not because of the technical aspects, but
because of a lack of the integration of certain contexts in the conception phase: social, geographical,
cultural, economic… That is why those aspects should be considered early in the development of
new approaches.[10] To illustrate this argument, we can take the example of the Smart Meter
Rollout in the Netherlands. The regulated pilot took 8 years to start because there was a resistance
from the public seeing it as a violation of their privacy. Finally, they had a second proposal that
resolved the privacy violation. However, it caused a bad reputation for this technology, and
therefore more resistance, even with the ultimate version.[11]

As a solution, public and private institutions must have extensive evaluations and surveys to know
their energy consumers. The more information they get, the more insights they have on how the
consumer interacts with the policies or technologies that they intent to implement. Generally, it is
very important to be conscious about the weaknesses and the strengths of an investment.
Moreover, real-life pilots can be carried out, by trying out a new technology on a sample of the
population. Pilots allow the interaction with the consumer to be at its maximum. This has been done
in the Netherlands by six companies, three knowledge institutes and forty households in 2013. The
project was about studying which smart technology would meet the most consumers requirements.
The ultimate goal was to make a choice of which technology would be the best to implement, with
regards to sustainability and cost savings.[12] Such methods give the opportunity for companies to
shape their products according to the consumers vision. However, it is important to keep in mind
that when a sample of the population is taken, it must be representative of the whole population. It
is not relevant for the global energy transition if only a certain society class is represented.

We can conclude that we are spectator of a shift to a more decentralised and participatory system.
In fact, we are not spectators anymore, since this change comes with a greater role for the citizen.
The energy transition is leading to a transformation of consumers to prosumers.
From consumer to prosumer
The prosumer concept was defined by Toffler in 1980: “a person that creates goods, services or
experiences for his own use or satisfaction, rather than for sale or exchange”.[13] It is not a new
concept. However, it first gained more sense with the improvement of communication technologies.
Indeed, the interaction between companies and their client has very much increased. On some
websites it is possible to directly interact with the brand, to give feedback, to share the vision of
what we would like to be created. The consumer opinion now matters much more in the conception
of the product.[14] Regarding the energy sector, the concept was more considered with the
improvement of technologies that would allow the consumer to have more control over its energy
consumption, or even to be able to produce its own energy supply. The citizen thus became a
considered actor in the electricity market. The consumer truly gets the opportunity to participate in
the greening system, by making its everyday life more sustainable.

Prosumers have a wide range of choices between different smart devices to achieve this goal. We
can think of solar photovoltaic panels, smart meters or home batteries.[15] They have more freedom
to choose what is better for their household. To keep this aspect of freedom, this large range of
choice must come with extensive information about those technologies and clarity on how the
system works and of which changes it will imply.

The implementation is not forced, it is a soft way to introduce environmental-friendly technologies.

However, if it is too soft, it might become difficult to implement at a large scale. Indeed, it already
exists in Europe, but the number of households following this model is very limited.[16] With more
transparency and communication, people will feel more familiar with this new way of living. What’s
more, through the communication, the opportunity is given to emphasize on the different
incentives: it is environmentally friendly but also means saving energy, having much more control,
and thus saving costs.

The aim is to turn the consumer into prosumer. It is clear this is the direction that is currently being
taken in the process of energy transition.

Discussion
The strengths of the empowerment of the consumer have been addressed in this paper. It is
important to keep in mind that it has its weaknesses, like any other change. Below, some of them
will be discussed.

First, we can criticize the fact that with the prosumer approach, too much responsibility might be
given to citizens. Not everyone cares about being more sustainable or about the energy transition.
Moreover, most of us in the European Union, are now used to a system that is very comfortable and
that is driven by consumption. I believe that it will be very difficult for some persons to change those
unsustainable habits without any regulations or constraints to force them to do so.

Sustainability can be considered as a luxury. The installation of devices required to transform the
citizen to a prosumer can be expensive and time-consuming. Not everyone can afford photovoltaics
panels or electric cars. Moreover, for a household to become more sustainable, it requires changes
in the infrastructure (better insulation for example), but also modifying the habits and the way of
consuming. Those are not priorities for many citizens.
However, if it does not become a standard, it would mean that the transition is not complete. If only
a certain part of the population conforms to the shift from being a consumer to being a prosumer, it
will not be enough to achieve the sustainable goals. It might happen, that without more ‘sticks’ and
‘carrots’, it could not become a standard. That is where the government plays a role. We can then
think about a mixed system with centralised and decentralised approaches. Indeed, with the
previous arguments, we might come to the conclusion that the government must set regulations or
create subsidies for the consumer to have an incentive. Financial help could support people who do
not have the financial capacity to invest in sustainability.

The government role would be to inform the population about the emergency of the situation and
the potential solutions. They do exist. It is therefore essential to not achieve a complete shift to a
decentralised system, but to let some power to the centralised government to set the ground rules.

Conclusion
The ultimate goal of this paper is to get a better understanding on how a sustainable society can be
built. Of course, to achieve this, we would need to go over hundreds of different equally important
subjects covering environmental, economic, social and cultural aspects of the transition. What we
can at least conclude from this paper, is that the role of the energy consumer is transforming into a
more powerful and decisive role. The system must change. Mindsets and paradigm as well, so that
citizens embrace the energy transition by modifying their way of life. The tools and information that
are given to the population must be in line with the sustainable goals. Moreover, in my opinion, a
mix of centralised and decentralised systems is necessary to reach a more participatory society.
Citizens can then become prosumers: new devices allow the consumer to both produce its own
energy and participate in adapting the energy supply. Today, only a small part of the population is
adopting these new practices. Hopefully, more and more will follow this movement.

We are becoming determining actors in greening the society thanks to the empowerment of the
consumer.

Policy makers try really hard to adapt our existing systems to reach a sustainable society. The debate
between structuralists and institutionalists question this approach. Is it actually possible to adapt our
way of functioning in a sustainable way? Or shouldn’t we change the whole structure of the society?
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