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Trust and risk in emerging energy infrastructures - the Smart Grid vision

Trust and risk in emerging energy infrastructures - the Smart Grid vision
Project team:Sumpf, Patrick (dissertation)
Start date:2013
End date:

2018

Research area:Knowledge society and knowledge policy

Project description

In modern societies, trust is an indispensable resource. It provides action capacity and gains relevance as a means of social cohesion to coordinate interactions among persons, organizations, and overarching social entities. Specifically, trust in abstract systems like expertise (science), money (economy), or ICT structures (technology) are of particular importance (see Luhmann 1979; Giddens 1990). This can be illustrated vividly with regard to current developments in the energy sector: Largely in Europe (see the German "Energy turn") but also in the US and Asia, visions of establishing intelligent, connected, and ICT-based energy infrastructures are prominent, detectable under the label of "smart grids" in numerous debates (Ramchurn et al. 2012). In this context, the consumer is confronted with investing trust into the functioning of an abstract energy system (confidence) as well as with novel technical applications ("smart meter"), markets, and supervisory agencies. While until now, electricity was rather perceived as a permanently available resource (power from the mains), a shift towards increased reflexivity regarding the demands of active consumers ("Prosumer"; "Demand side management") seems to be present among political and economic actors which, among consumers, could lead to a new willingness to trust.

Trust, distrust, risk

Trust requirements of this kind, being accumulated as action enabling components within increasingly non-transparent system developments as in the energy sector, simultaneously, create risks. In general, it is true that every act of trust is a risky investment because of potential negative side effects in the future (Luhmann 1988). Moreover, it is particularly valid that risks emerge as a side effect of an intense increase in trust investment in domains where non-transparencies, future uncertainties, and competing business models and development paths are meant to be exploited as productively as possible (Strulik 2006). This is especially true for the transforming sector of energy, especially in Germany, where future contingencies are actively shaped and dealt with in countless scenarios and models of system constitution dependent on massive amounts of trust absorption. In this way, comparable to developments in the global financial system, trust may generate a unique risk dynamic by means of overdrawn trust dispense ("blind trust"), resulting from one-sided and factually delimited scopes of trust and confidence in system components such as markets (coordinating "Virtual power plants"), technologies (smart meters) or certificates (e.g. on ICT security). The question of security as opposed to the risk inherent in future energy systems is, therefore, one encompassing the relation between trust and distrust: Trust evokes the necessary action capacities for becoming involved in smart grid activities while distrust, as a functional equivalent, retains mindfulness, discovers weaknesses (product and system flaws, flaws of business models) and, therefore, at its best, leads to useful reforms in politics, economics, and public matters (e.g. models of participation).

Research questions and methodical approaches

So far, the PhD thesis seeks to frame its approach with a focused narrative of international smart grid development within which the example of the German "Energy turn" serves as a prominent example and major reference frame. Following this embedment, the analysis wants to tackle the most striking trust issues in emerging smart grid energy systems and point out their inherent risk dynamics and associated secondary problems (e.g. challenges of public trust communication, dynamics between politics and new markets, changing socio-technical constellations). All of this is scrutinized along the premise of certain realizations of the smart grid components in focus which are described and presented according to the predominant visions. So far, trust issues seem most relevant in the following realms comprising three case studies:

  1. Public acceptance of systemic energy transformations
  2. The development of new electricity markets with potential dependencies on financial markets and derivative instruments (e.g. capacity markets)
  3. Restructuring of system responsibilities and role allocations between Transmission Service Operators (TSO) and Distribution Service Operators (DSO) in a changing governance framework.

In all empirical fields, those qualitative changes in modern energy systems that are observed in these areas or have to be expected for the reason of being well-founded (e.g. based on experiences in the field of global finance) are intended to be displayed. To achieve this, a comparison between the existing and the emerging trust relations through a functional mapping and level analysis is envisaged in all three fields. As a first result, a "trust map" is supposed to be drafted, providing insight into the "trust architecture" of energy system components and building the basis for further proceedings. At the same time, emphasis is directed systematically towards the relationship between trust and (systemic) risk, a concept according to which the scrutiny of each case study is subjugated. This seems to be specifically fruitful against the background of targeting systemic trust in future energy systems so that concrete risks in each empirical field can be derived as a consequence and/or as a source of particular trust problems and vice versa. As a concrete methodology, a triangulation between functionalism, expert interviews, and document analysis is intended.

Literature

Giddens, A. (1990)
The Consequences of Modernity. Stanford: Stanford University Press

Luhmann, N. (1979)
Trust and Power. Two Works by Niklas Luhmann. Chichester: Wiley

Luhmann, N. (1988)
Familiarity, confidence, trust: Problems and alternatives. In: Gambetta, D. (ed.), Trust: Making and breaking cooperative relations (pp. 94-107). Oxford, England: Basil Blackwell

Ramchurn, S. D.; Vytelingum, P.; Rogers, A.; Jennings, N. R. (2012)
Putting the 'Smarts' into the Smart Grid: A Grand Challenge for Artificial Intelligence. In: COMMUN ACM 55, 86–97

Strulik, T. (2006)
Rating Agencies, Ignorance and the Knowledge-Based Production of System Trust. In: Strulik, T.; Willke, H. (eds.): Towards a Cognitive Mode in Global Finance. The Governance of a Knowledge-Based Financial System. Frankfurt/New York: Campus, 239-258

Administrative data

Supervisor: PD Dr. Torsten Strulik, Universität Bielefeld
Advisor: Dr. Christian Büscher
Doctoral students at ITAS: See Doctoral Studies at ITAS

Contact

Patrick Sumpf
Karlsruhe Institute of Technology (KIT)
Institute for Technology Assessment and Systems Analysis (ITAS)
P.O. Box 3640
76021 Karlsruhe
Germany