Institutional Features of the Fourth Energy Transition

Abstract

The world has experienced three energy transitions, which were accompanied by large-scale institutional changes that determined global energy development trends. As in previous cases, the current energy transition, defined as the shift to sustainable energy, is accompanied by significant changes in the institutional environment. The fourth energy transition, unlike previous ones, which were the result of a combination of objective factors, is a kind of global experiment. The governments of Western countries have done voluntary changes in the global institutional environment in order to create a certain track of change in the global energy industry. The launch of the fourth energy transition could not take place without legal and financial support for energy projects that met the principles of sustainable development. Nevertheless, the next institutional changes, that increase the likelihood that the transformation process in the global energy sector will become a self-sustaining process, have taken place. A global public narrative has appeared, describing in a concise, simplified and emotionally charged form the need for sustainable energy, the mechanisms for achieving it and the factors hindering its development. The narrative leads to stabilization of the transition through influencing on the political decision-making process and supporting self-sustaining replication mechanisms. The narrative makes the practice of corporate social responsibility activities compulsory for large energy companies. Another trend that has emerged in the current energy transition is the shift from centralized to network organizational structure of local energy systems. The network organizational structure of energy systems, supported not only by the spatial dispersion of a larger number of energy facilities, but also by the increased diversification of the types of facilities, leads to the formation of global homogeneity and local differentiation. Identified changes in the global institutional environment make a significant impact on the dynamics of the development of local energy systems and create stable trends that could proceed independently of the still significant government support.