Transforming energy productivity through value chains

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The confluence of policy, standards, markets, technology and society within the regime makes it stable, as each aspect reinforces the status quo, or tends to restrict change to incremental advances (Geels 2002). This resistance to change, or lock-in and path dependency, associated with socio-technical regimes can act to resist the adoption of new and better innovations (Klitkou et al. 2015). For example, socio-technical transitions have been used to analyse the continuation of coal-fired energy systems in Japan (Trencher et al. 2020). Therefore, socio-technical transitions can be seen as a framework for understanding how to overcome locked-in regimes through the adoption and absorption of niche innovations and pressures resulting from the socio-technical landscape. However, what constitutes a regime is not clearly defined, as a regime change at one level may be an incremental change at another (Berkhout, Smith & Stirling 2004). Niche innovations The niche innovations level is where radical novelties are developed and incubated, supported and protected from market forces due to their potential longer-term benefits. As Figure 4 indicates, niche innovations respond to the socio-technical regime and landscape, initially operating outside the regime and responding to specialised requirements as the innovation develops in response to user requirements but relying on enabling hard and soft infrastructure and enablers. Niche innovations influence the regime when “elements become aligned and stabilise in a dominant design” (Geels & Schot 2007, p. 401). Socio-technical landscape The landscape level is different to the others, it is an analogy of physical landscapes, and sets the environment that the regime moves through over time (Rip & Kemp 1998; Geels & Schot 2007). The socio-technical landscapes are the wider, macro-level factors that influence the direction of socio-technical transitions from beyond the regime, such as macroeconomics, cultural patterns and political developments. Landscapes do not directly determine the socio-technical regime, but “provide deep-structural ‘gradients of force’ that make some actions easier than others” (Geels & Schot 2007, p. 403). While landscapes are often slow to change, when they do it creates new pressures on the socio-technical regime, which provides an impetus for innovations to be adopted within the system.

2.3 Production, value chains and end use services The objective of this project was to identify opportunities for increasing energy productivity in key Australian value chains. The investigations started with identifying the end use service being provided and considering more productive ways of providing that service as well as potentially redefining the way the service was perceived. As a result, the research enabled opportunities for industry disruption and restructuring of production systems to be identified, as well as incremental changes to existing production. This section of the report proceeds by outlining the approach taken to the value chains and analyses of the systems of production, the application of value chain analysis and the reconsideration of end use services. This is followed by a description of the four phases of the methods used to collect and analyse the data to identify opportunities for energy productivity improvements.

2.3.1 Systems of production Production systems can be seen as the process of converting raw materials into goods and services for consumption. Each stage of the production system is associated with flows:

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