Aida Astuti Cahyaningwidi 4614860 Individual Assignment Question 1

Multilevel Perspective and Strategic Niche Management Analysis:

The Case of Warmterotonde Project in The Netherlands

Innovation of new technologies takes place every day. However, it is not easy for the newly
emerged technologies to be implemented in regular, existing market. There are many factors
are included, including the development of the technology itself and the social factors
surrounding it. In this essay, Warmterotonde project is discussed and taken as an example.
Warmterotonde, literally translates to heat roundabout, is an initiative that aims to link cities in
the Province of South Holland, The Netherlands, to various types of sustainable heating sources
in order to create a smart grid heating system. To analyse how this newly emerged technology
can breakthrough to existing market, a multilevel perspective analysis is used alongside the
strategic niche management analysis. Both the multilevel perspective analysis and strategic
niche analysis from which this essay is based come from the report Sustainable Grid Heating
System in The Netherlands that was written by Cahyaningwidi, et al. (2017).
First it is important to understand the levels exists within the multilevel perspective analysis
framework. There are three levels that can be identified in the multilevel perspective of
technological transitions. The first level is the niche. Niche is the place where radical
innovations take place. Niches are protected as to give room to innovations to grow and
develop. The technologies in niches are usually still in research, i.e. not yet perfect and
relatively expensive compared to the regular market (Geels, 2002). The protections for
technologies nested in niches can take form as subsidies, laws favouring the new technologies,
and lease system instead of ownership (Hoogma, 2000 in Raven, 2004). Niche is important as
it allows new technologies to go through learning process but the effect is that most of the time
it is hard for the new technology to leave the niche and move to the next level. Warmterotonde
is still in the niche level.
The second level is the socio-technical regime. Regime is the broader situation surrounding a
certain technology. The rules and routines done by actors are set in the regime, including
existing infrastructures, existing laws, existing players in the same technological field, and user
preferences (Raven, 2004). In regimes, there is a kind of stability that occurs (Geels, 2002).
Nevertheless, regimes have the ability to adapt to pressure through some adjustments. The
selection pressures that happen to a regimes are caused by the creation within niches of novel
socio-technical configurations, an innovation that seeds a transformation in a spanning
regime, the sur to innovation felt through competition from another socio-technological regime
serving the same or over-lapping markets, emergence of alternative visions of the future, the
generation of changes in the social landscape that put the regime in tension, and public debates
targeted at changing socio-technical regimes (Smith, et al., 2005).
The regimes in which Warmterotonde nested are energy mix regime, energy infrastructure
regime, and industrial network regime (Cahyaningwidi, et al., 2017). As most of the heating
system in the country still uses fossil fuel, i.e. natural gas, the energy mix in The Netherlands
now is still far from being CO2 neutral. On the other hand, the national government has set a
national target to reduce CO2 emissions by 80 to 95 percent by 2050. The condition of the
 Aida Astuti Cahyaningwidi 4614860 Individual Assignment Question 1

regime is not aligned with Dutch government expectation. Nevertheless, by incorporating

technologies like Warmterotonde, the government is trying to make a move towards the said
target of CO2 emission. The next regime to be analyse is the energy transportation
infrastructure. According to Schepers and Van Valkengoed (2009), most cities in The
Netherlands are already using district heating grids. As the Warmterotonde project unfolded,
the actors learnt that the grids must be updated to suit the needs of Warmterotonde. This will
result in the need of large investment for the renewal of the infrastructure. The building of the
new infrastructure can be done with a collaboration between the government and the energy
suppliers. Both of these regimes can be regulated by the regulating actor, i.e. government and
policy makers.
The last regime is the industrial network or the market between the heat producers and
consumers. This network consists of the companies who already have heat exchange networks
and the companies who are looking for new business opportunity. The first kind of companies
dont look for major changes in terms of their operation. It is different however with the second
kind of companies. These companies are open to changes offered by Warmterotonde project.
They see the chance to widen their wings and gain more profit. Not all of the companies are
directly related to energy industry. This shows the scale of the market within regime. It does
not only deal with same-field industry but also to other industries, showing interlinking in the
social life.
There are five factors that make it difficult for new technologies like Warmterotonde to
breakthrough to the regime level. Those are learning by using, which accelerates technological
improvement; network externalities, which deal with how wide is the usage of the technology,
the more a technology is used, the easier it is to use the technology as applications are
developed for it; economies of scale, which reduce the price; increasing informational returns,
whereby the more people use, the easier for other to learn about the technology; and
development of complementary technologies, which both reinforce the position of the
technology and make it more useful (Agnolucci and Ekins, 2007). Warmterotonde has a very
good chance to breakthrough to regime level. First, the technologies that support the system of
Warmterotonde are readily available. Researchers and industries alike already know about
extracting heat from the earth, recirculating the waste heat from industries, and creating heat
by using biofuel. Second, the network in which Warmterotonde takes place is already a
complete network. The network consists of all actor groups, ranging from end users, energy
suppliers/brokers, government, industries, network operators, societal organisations, and
knowledge institutes. Each of the actors plays the role in preparing the regime to be ready for
full implementation of Warmterotonde, for instance, the governments build regulation about
district heating that favours sustainable district heating while network operators working
together with the municipalities build infrastructure network connecting everyone. Third,
although this comes as a big investment in the start, building infrastructure for smart grid
heating system is a crucial need. The existing infrastructure of district heating is getting old
and will need to be replaced, so incorporating the new technology in building the infrastructure
may come as a good investment for the futures. Moreover, with the easily access information
 Aida Astuti Cahyaningwidi 4614860 Individual Assignment Question 1

over this project, more and more people will be aware and interested in making use of this
project.
The third and the largest is the socio-technical landscape. Landscape is the external structure
that in which regimes are nested. It is the largest scale, covers not only relevant industries but
also other factors that may influence the industry. The factors in landscape includes but not
limited to demographics, available resources, culture, international environmental issues,
countrys GDP, and population growth. Landscape can also be influenced by actors, but only
actors whose actions make large impact such as governments (Agnolucci and Ekins, 2007).
Changes do happen in landscape level, but generally very slowly (Geels, 2002; Raven, 2004).
However, unexpected events can bring sudden change to the landscape (van Eijck and Romijn,
2008). For examples, the Chernobyl accident, which slowed down nuclear energy
development, and oil price drop, which reduced the urgency of renewable energy development.
The regimes are nested under even broader scope of coverage, the landscape. In the report, two
landscape in which Warmterotonde operates are identified. The first is national landscape and
the second is global landscape. The two landscapes are actually interlinked. The decisions and
regulations made by the Dutch governments are a result of global discussion. By agreeing to
the Paris agreement, The Netherlands has the obligation to lower its CO2 emissions and
increase its energy efficiency. With the obligation, now Dutch government has to arrange the
regulation accordingly. In the national landscape of energy related regimes, mostly provincial
politics play a role although the national government does have a final say. Warmterotonde is
a good example. It was started with initiation within The Province of South Holland, but it is
fully supported by the national government. The project was brought to a temporary halt when
Den Haag refused to use hot wastewater that comes from industry that uses fossil fuel.
However, after the national government issued a regulation related to sustainable heating, the
municipality of Den Haag has no choice but to continue forth with Warmterotonde.
In global landscape, awareness of climate change continues to raise day after day. This will
lead the citizens of the world to a more sustainable way of thinking. They will consciously
make an effort to slow down climate change through their choice in daily life. The culture of
sustainable living will give way to technologies like Warmterotonde. As in many countries
space conditioning is responsible for a big percentage of energy use, the technology of
Warmterotonde comes as a decent solution. It is reliable and virtually benign to the
environment. It is not impossible that projects like Warmterotonde will be duplicated in
countries across the world and change the landscape on how district heating should function.
The niche of Warmterotonde, although small, also influence the regime and landscape in which
it is nested. With the initiation of the project, the actors involved in the regimes are brought
together and most likely, benefits from each other. It makes the energy suppliers, for instance,
change their way of thinking as how to still contribute in energy supplying while aligning with
the government will of reducing CO2 emissions. It also influences the planning of the
government and municipalities regarding infrastructure in general, because piping
infrastructure is not a small infrastructure and will most likely have impact in the process of
building and after. On the landscape level, Warmterotonde technology shows the world the
 Aida Astuti Cahyaningwidi 4614860 Individual Assignment Question 1

capability of the Netherlands as one of the developed country of western Europe. With its high
GDP, people of the Netherlands should be able to afford the now more expensive system of
district heating, setting itself as an example to other countries. On the other light, the use of
Warmterotonde will also reduce the dependencies of The Netherlands to Russia. As the
Netherlands reduce its production of gas due to earthquakes that happen in the area where the
gas comes, more supply comes from Russia.
In conclusion, it is clear that each level in the multilevel perspective gives influence to other
levels. It is also obvious that there are relations between the factors in the multilevel perspective
framework and the indicators within strategic niche management framework. As for the
Warmterotonde, it can be said that although Warmterotonde is still in the early phase and still
a lot of things to do next, there is a big possibility that Warmterotonde will break out from the
niche into the regime level in the near future.
 Aida Astuti Cahyaningwidi 4614860 Individual Assignment Question 1

Reference List

Agnolucci, P. and P. Ekins. (2007). Technological transitions and Strategic Niche

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van Eijck, J. and H. Romijn. (2008). Prospects for Jathropa biofuels in Tanzania: An Analysis
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Schepers, B.L. and M.P.J. van Valkengoed. (2009). Overzicht van grootschalige warmtenetten
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