2.1.6 Productivity and costs As an observation, this project comes at time of transitions in the Australian energy sector. Many fossil fuelbased generators are reaching the end of their productive lives, and renewable energy capacity, both distributed and large scale, is increasing to meet demands, and at the same time the demand for grid-supplied energy has stagnated (Clean Energy Council, 2021; Cranney, 2020). At the same time, energy market prices are in decline, a trend likely to continue with the ongoing development of storage and renewable energy generation systems (Blakers, 2021). While relationships between productivity and energy use are unsettled and contingent (Elkomy et al., 2020), declining energy costs with increasing renewables will counter initiatives to increase energy productivity and efficiency in Australian industry, unless other forms of value from energy efficiency and productivity are recognised. And EP/MB provide ways of valuing EE benefits in a more comprehensive way. The increasing share of renewables in the national energy market does not mean that energy productivity and efficiency measures are no longer important goals. Reducing demand can hasten the demise of inefficient and high emissions older generators in the supply network, as well as the costs of energy supply (IEA, 2018). A major challenge in energy-related improvements in industry is that for many sectors energy is already a minor contributor to industry costs and so is not included within the rationale of decision making. Further cost declines will only reduce the impetus for industry to take up energy measures, unless we focus more on the non-energy cost value.
2.2 Innovation, disruption and socio-technical transitions The purpose of this section is to provide insights into how inventions and innovations arise and transition into new products and practices in the functioning of society. The multi-level perspective of socio-technical transitions provides a basis for understanding how transitions occur as an interaction between innovations, social norms and practices, and broader influences such as government policies. These insights will underpin subsequent studies of how such transitions can result in increased energy productivity in economic sectors within Australia. Transitions, or changes in the way society operates, can be seen as a contest, based on the “multi-dimensional interactions between impulses for radical change and the forces of stability and path dependence” (Köhler et al. 2019, p. 2). It is the social, economic and political systems, the inertia of current practices, that resist the adoption of new technologies and systems, as: … these innovations require breaking down the routine behaviour that is daily reproduced by individuals, groups, business communities, policy actors and society at large. For this reason, the introduction and scaling-up of such innovations are not completely under the control of a single actor (or a small network of actors), because changes in the factors that form the boundary conditions (i.e., existing organisations, institutions, networks, dominant practices, interests etc.), are as well required (Ceschin 2014, p. 2). This also means that transitions are difficult and are not always met positively by all sections of society—they are associated with disruptions.
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Transforming energy productivity through value chains
