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Governance, Innovation & Change
Transition
Transition describes the process through which an energy system shifts from one configuration to another, involving changes in technologies, actor roles, institutional structures, and governance arrangements. In the context of smart grids, this means moving from centralised, unidirectional power systems toward decentralised, digitally coordinated ones — a process that is non-linear, contested, and never purely technical.
Why this matters
Transition is distinct from incremental improvement: it implies that the basic architecture of the system, the relationships among its components, and the rules governing them are all being reconfigured simultaneously. The multi-level perspective provides a widely used framework for understanding how this happens — through interactions between niche innovations developed in protected spaces, an established socio-technical regime that tends toward stability, and broader landscape pressures such as climate change or geopolitical shifts that can destabilise the regime and create openings for change.1)
Transitions happen when niche innovations, regime pressures, and landscape dynamics interact in ways that produce lasting structural change — not when any one of them acts alone.
A shared definition
Transition in the context of smart grids refers to the systemic reconfiguration of a socio-technical system, involving simultaneous changes in technologies, institutions, actor roles, and cultural expectations over extended time periods.2)
Socio-technical systems are organised and operated according to specific sets of principles that shape which technologies are selected, how actors relate to each other, and what is considered legitimate behaviour. These organising principles are embedded in institutions — the rules, norms, and beliefs that regulate, but do not determine, the perceptions and activities of actors. Institutions give systems stability, but actors are knowledgeable agents who can reflexively interpret rules, challenge norms, and actively reshape the systems they operate within.3)
ISGAN Working Group 7 on Smart Grids Transitions frames the challenge across four interdependent dimensions:
| Grid Technologies & Architecture generation, transmission, local grids, storage, supply, load | Institutional Ecosystem & Networks sectoral, corporate, public, civic networks |
|---|---|
| Actors and Users producing, moving, living, other energy practices | Complex Governance Processes anticipating, adapting, agile acting, orchestrating, steering |
Transitions involve simultaneous co-evolution across all four dimensions. Geels and Schot identify four distinct transition pathways: transformation (regime actors redirect the system under moderate pressure); technological substitution (mature niche innovations replace the regime under strong pressure); reconfiguration (symbiotic innovations trigger architectural change incrementally); and de-alignment and re-alignment (sudden disruption destabilises the regime before a new configuration emerges).4)
Perspectives
Who acts, what is built, and what rules govern the system all change in a transition — and rarely at the same pace.
Actors and stakeholders
Transitions reshape actor constellations. Incumbent utilities face strategic choices about their business models while new entrants — aggregators, community energy organisations, platform operators — bring different capabilities and interests. Consumers become prosumers with generation assets and flexibility to offer. Crucially, transitions emerge from both intentional strategies and the unplanned outcomes of many actors pursuing their own agendas simultaneously.
Uruguay – national wind transition
State-led coordination between the national utility UTE and clear policy direction produced rapid wind integration, now covering the majority of annual electricity generation — a transition shaped by strong incumbent-actor alignment with policy goals.5)
Germany – Energiewende actor landscape
The transition has generated citizen energy cooperatives, re-entering municipal utilities, and new aggregator businesses alongside incumbent adaptation and continuous regulatory negotiation.6)
South Africa – Independent Power Producer programme
New private generation actors were introduced into a system previously dominated by state utility Eskom, creating a dynamic where new entrants and an incumbent operate alongside each other under still-evolving institutional arrangements.7)
Technologies and infrastructure
Energy system infrastructure changes slowly. Transmission networks, distribution grids, and large generation plants have multi-decade lifespans. Smart grid technologies coexist with legacy infrastructure, requiring new interfaces, control approaches, and interoperability standards. The concept of system architecture captures how components are arranged: transitions often involve shifts from centralised, hierarchical configurations toward more distributed, networked ones.8)
China – ultra-high-voltage and distributed solar
A transition combining massive centralised infrastructure with rapid distributed solar deployment, enabled by state manufacturing capacity, subsidies, and unified national planning.9)
Kenya – off-grid to grid transition
Rural areas are experiencing layered transitions from no access through off-grid solar toward eventual grid connection — different stages coexisting geographically within the same country.10)
Institutional structures
Institutions shape the pace and direction of transitions. Transition management — a governance approach developed in the Netherlands — proposes that transitions benefit from dedicated arenas for long-term visioning and adaptive experimentation that operate alongside established structures.11) In practice, transitions often involve institutional layering: new rules for flexibility markets or citizen energy communities added to frameworks designed for centralised systems, creating tensions between old and new logics.
European Union – Clean Energy Package
Directive 2019/944 establishes new market rules for active customers, citizen energy communities, and aggregators — a supranational institutional transition reshaping the architecture for electricity across member states.12)
Key terms
Multi-level perspective: an analytical framework explaining transitions through interactions between niche innovations, the established socio-technical regime, and broader landscape pressures.13)
Regime: the dominant, stable configuration of technologies, institutions, actor networks, and cognitive frames constituting the established way of organising a socio-technical system.
Transition pathway: a distinct pattern through which a socio-technical regime changes, determined by the relative timing and strength of niche development and landscape pressure.14)