The Politics of Market Change towards Sustainability: Revisiting Germany’s Policy Support Framework for Renewables

Abstract

Legislative efforts for renewables-based energy decarbonisation hinge upon the support and commitment from different stakeholders holding often conflicting positions regarding disruptive processes of socio-technical transformation. However, the evolving acceptance of market actors on the policy-driven promotion of renewables over time remains under-scrutinised. Simultaneously, despite growing attention to power and politics in sustainability transitions, limited efforts remain invested for elucidating the political-economic nature of the market-based selection environments they are operationalised through, highlighting the need for a more systematic comprehension of the “politics of selection”. To address these shortcomings, this paper provides a more refined understanding of the role of policy-driven markets and its participating agents in facilitating/hindering innovation diffusion and broader (system-wide) sustainability transitions. To do so, it showcases a longitudinal case study of the politics underlying Germany’s evolving feed-in policy support framework for orchestrating a market-mediated diffusion of renewables (1980s–2020). Based on policy analysis and semi-structured interviews, the study traces the changing acceptance and ensuing strategic (re)actions of market actors to the emergence and evolution of Germany’s market for electricity from renewable energy sources. Results show how different market participants effectively shape the selection environments they operate in by proactively contesting/deluding the design features of the support policies organising their economised relations (e.g., market entry conditions, exchange rules, remuneration levels, pricing schemes, etc.). Such efforts are undertaken through legal means and market framing strategies targeting the affordability of policy support costs, coupled with the strategic use of policy instrumentation as a vehicle to further expand/retain their market shares to the detriment of competing actors.