New technologies and innovation are often seen as the best way to combat climate change [1, 2]. Renewable energy (RE) systems and their derivatives - including production, infrastructure, storage, and management technologies - are becoming a central component of the clean energy transition, and their establishment requires innovation, investments, and deployment policies for emerging technologies [3–5]. Ideally, innovation-friendly governance should endorse climate protection, encourage competition in developing new products, create new markets, strengthen the economy and generate job opportunities [6, 7].
The emergence of innovation is often described as a linear sequence in which a product stems from research labs, is then developed, commercialized, and diffused to the market by an industry (‘technology push’), or as an invention that is proposed or developed as a solution to an identified new market needs (‘market pull’). In practice, market-pull and technology-push are matched when a need and a solution emerge simultaneously. This matching is critical for mainstreaming innovation [7–12]. However, the assumption that innovation results from coupling new technologies and market demand overlooks the social, political, and cultural contexts in which this process takes place. The contextual aspects of RE innovation include elements such as public awareness of environmental problems and resource exploitation, as well as concerns regarding health hazards linked to different RE systems [13, 14]. The linear push and pull perspective does not pay sufficient attention to the various components that are associated with innovation development [8].
The 'systems of innovation' approach, which emerged in the mid-90s [15–21], perceives innovation as initiated and shaped by the 'systemic' interactions between multiple actors, institutions, research, and technical change. It presents the emergence of innovation as a horizontal prism, rather than the narrow and vertical focus of technology-push and market-pull [22]. Thus, innovation is recognized as a multi-layered network that assembles different actors (including, for example, academic institutions, commercial corporates, investments funds, professionals, policymakers) from different levels (local, regional, national), joined by the mutual goal to enable a change or sectoral development, and which eventually creates an innovation ecosystem [23–26].
Governments around the world are increasingly striving to create and support clean-tech, energy-tech, and climate-tech innovation ecosystems to promote an innovation-supporting environment [27]. However, current energy innovation policies are still very much aligned with the dichotomous notion of technology-push and market-pull and its underlying logic that supply-side leads to demand-shift, and influences both the area where innovation is needed and the timeline of innovation emergence [8, 28, 29]. This logic leads to top-down induced incentives for energy innovation, such as motivating “carrots” and penalizing “sticks” in the forms of government-supported Research and Development (R&D), Feed-in-Tariffs (FiT), subsidies, tax credits, or rebates for consumers [30–36]. It ignores, however, broader elements that influence the spread of innovation, such as skills and training, and the role of prototyping and demonstration. It also overlooks the fact that all technologies, including RE technologies, are improving continually and these improvements affect the whole energy system [27].
Various actors aside from governments are operating in the arena of RE innovative technologies, including non-governmental organizations (NGOs), professional organizations, commercial firms, local municipalities, and others. These actors are filling an active role in the development and implementation of innovation. They support many innovative initiatives by, for example, offering funding, providing a field for experimentation, creating regional hubs, supporting energy cooperatives, or declaring carbon neutrality zones [37–42]. Their roles extend beyond the aspects directly related to technology development, as they also provide innovative ideas and serve as knowledge brokers, watchdogs, lobbyists, and representors of marginal voices [37, 43–45]. As such, these actors are essential players in the innovation network and participate in the low carbon transition, and often fill a lead role in it.
Those actors participating in the transition network are considered by the Middle Out Perspective (MOP) as middle actors. The MOP [46, 47] is an analytical framework used to understand how socio-technical changes happen. It focuses on middle actors that are positioned in-between the policymakers at the top and the energy users at the bottom. Because they have assets and resources, middle actors can diffuse their agendas, knowledge, and experience in a middle-out manner: upwards (to influence policymakers), downwards (to influence citizens and end-users) and sideways across their networks (to influence other organizations, companies, and actors located in between the levels).
Although financial policies associated with technology-push and market-pull fail to address the complexity of innovation processes and the creation of an innovation network of actors, it is useful to examine the innovation process using the push and pull terminology. The push and pull concepts capture the balance of forces affecting the co-dependent relationships between the various actors, facilities, institutions, funds, and knowledge, which together compose the innovation ecosystem. Therefore, this paper proposes a socio-technical interpretation of the push and pull terminology within the MOP context: while middle actors driven by economic considerations, needs, environmental values, social norms, and ideology, are 'pushing' the implementation of RE technologies, they are also 'pulling' by decision-makers and other middle actors towards a socio-technical low carbon transition. The push and pull forces and the interactions between actors lead to the engagement of new stakeholders in the innovation arena and weave a network that creates an effective innovation ecosystem.
This study follows the evolution and roles that the local public benefit corporate 'Eilat-Eilot Renewable Energy Initiative' (hereafter, Eilat-Eilot) has played in the creation of the Israeli RE innovation ecosystem. Eilat-Eilot is located in the south of Israel and was established in 2002 by two neighboring local municipalities. Despite its peripheral location, low socioeconomic status, the lack of supportive national climate policy, and insufficient RE supporting regulation, Eilat-Eilot set itself an ambitious goal to promote regional clean energy self-sufficiency by 2025, and to become a leader in the development of low-carbon innovative technologies.
Using the MOP as an analytical framework and the push and pull terminology, our analysis (1) Demonstrates the middle actor role played by Eilat-Eilot in initiating and strengthening an innovation network to promote sustainable local development; (2) Traces the push and pull forces between Eilat-Eilot and policymakers and shows how Eilat-Eilot activities challenged the unambitious national targets and contributed to Israel’s RE energy policy; and (3) Follows the formation of RE innovation ecosystem and highlights its contribution to the development and implementation of RE in Israel.
Most of the MOP research to date has focused on middle actors’ impact on top and bottom actors. Much less attention has been given to the sideway impact, i.e., the impact of middle actors on other actors located between the top and bottom [48]. Tracing the activities by which a middle actor initiates and develops a network of actors sheds light on this less studied MOP aspect – the sideways impact. The case study demonstrates the need for a network composed of many top, bottom, and middle actors to effectively promote innovation in general, and in the RE area in particular. By combining the MOP and innovation literature, this paper argues that an innovation ecosystem could be established from the middle out. This insight has practical implications for the EU RE promotion policies. The EU seeks to strengthen local governments and local communities and to promote their social and environmental resilience by relying on sustainable and local assets and resources [49, 50]. Local climate mitigation solutions and social resilience could be gained by innovation or policies that are suitable for the local socio-technical conditions, and which local governments are familiar with. Hence, while this paper focuses on a case study from Israel, the insights from the phenomena it demonstrates – the creation of effective innovation promoting networks - are relevant to other places in which the local government's targets are more ambitious than those of the central government.
The paper begins with a short introduction to the MOP followed by a description of Israel's RE policy and the research method. Next, we present the findings, which track the development of the Eilat-Eilot network between 2002-2020 and the impact it had on the RE innovation ecosystem and the RE sector in Israel. The paper concludes with some policy recommendations.
The Middle-Out Perspective
The transition to a low carbon energy system is often seen as a process induced by policymakers through regulation and economic incentives in a top-down manner, or by local organizations and civic pressure in a bottom-up manner. The MOP suggests that there is a 'middle' layer of active and influential actors between the policymakers at the top and the citizens at the bottom. Policymakers ignore many of these middle actors as they are not perceived as having any official role in the transition [46, 47]. The groups of middle actors include a variety of for-profit and non-profit organizations, communities, groups of professionals, and institutions that contribute to a systematic durable change of the energy system [47, 48, 51–58]. The MOP argues that due to their position between the top and bottom and their connections with actors positioned at the top and bottom, middle actors can influence in three directions - upwards on government officials and regulators, downwards on end-users and citizens, and sideways on peers and similar organizations and actors. The strength of middle actors stems from their perception as reliable and legitimate by other actors in the policy domain, and from their unique qualities which other actors in the system are short of or lack, such as tacit knowledge and skills, unique access to financial resources and other assets, social and professional legitimacies, and unique communication channels [46, 47]. Previous studies which applied to the MOP in the field of energy and the field of public health demonstrated how middle actors fill the functions of (1) aggregators of assets and financial resources, thus supporting and coordinating valuable actions; (2) mediators between policymakers and the public, thus making relevant information and regulation accessible to the public, and at the same time reflecting the public's needs and concerns to policymakers; and (3) enablers of actions by having the knowledge and capability to tackle physical, technical and bureaucratic difficulties [46, 59, 60].
The MOP also suggests that an actor with high levels of agency and capacity can derive a durable change. Agency indicates an actor's motivation, interest, and willingness to act in order to achieve a certain goal, and is shaped by social norms, culture, common practice, and regulation. Capacity indicates the actor's capability to execute the actions it wishes to perform, and is affected by external factors (such as physical and technical abilities, existing infrastructure, and available technologies), as well as internal factors (such as financial means, knowledge, and expertise) [47, 48, 61–63]. Middle actors have the unique qualities and assets necessary to elevate the levels of agency and capacity of other actors in the policy arena – at the top, middle and bottom - thus increasing the likelihood for a durable change to occur [47].
Previous research demonstrated how various middle actors, including religious congregations [47] building professionals [46, 53, 54, 60, 64–66] local communities [61, 67], businesses [48] and social groups [57, 59] performed middle-out strategies and promoted the transition to a low carbon society in various ways. These studies focused mainly on the influence on top and bottom actors. Other studies followed the mechanisms of influence in the fields of RE and electric vehicles [48]. Here, we emphasize the sideway mode of actions and the sideway impacts and highlight how middle actors establish an actor-network by interacting with other actors. As this network broadens, it forms an effective innovation ecosystem.
Israel's renewable energy status: unambitious targets and lagging implementation
In 2020, the Israeli electricity fuel mix included 70% natural gas, 24% coal, and only 6% RE. By 2025, Israel intends to phase out coal, increase the production and dependence on natural gas to nearly 80%, and increase renewable production to 21% [68]. Approximately 55% of Israel’s GHG emissions are associated with electricity production [69], more than transportation, industry, and agriculture combined. Therefore, meaningful mitigation strategies should focus on the transition to low carbon and renewable-based electricity generation [70]. However, while improving Israel's energy independence, the discovery of major natural gas reserves strengthens Israel's dependency on fossil fuels, and some argue that it delays the decarbonization process [71–73].
Unlike other countries that are members of the Organization for Economic Co-operation and Development (OECD), Israel National Determined Contributions (NDCs) to reduce national emissions and adapt to the impacts of climate change are moderate and unambitious [74]. In addition, the pledge to reduce emissions is on a per capita basis (from 10.4 to 7.7 million tons CO2e per capita by 2030) but due to Israel's high birth rate, the per capita reductions will be compensated by population growth, thus Israel is not expected to reduce its overall emissions at all [75].
Israel is already experiencing climate change effects such as rising minimum and maximum temperatures, sea-level rise, and more frequent extreme weather events, including prolonged droughts and floods [74]. It undoubtedly needs to formulate effective climate adaptation policies, while contributing to the world's mitigation efforts to transition to a low carbon society [71].
Four types of renewable sources are suitable for Israel's conditions: the most prominent and applicable one being solar (PV and thermo-sola), followed by wind, biomass, and biogas [76]. However, a combination of economic and political factors, rather than concerns regarding climate change, have influenced Israel's RE targets. These factors include the cost of technology and the financial support required by the state for early adopters, as well as the aspiration to become a member of the OECD and ratify the Paris Agreement [77]. Over the years, Israeli Governments have made several decisions regarding the production of electricity from RE sources [78]. Table 1 summarizes four governmental RE targets that were set over 20 years, between 2002-2021, and the actual RE production.
Table 1: RE Governmental Decisions 2002-2021
Decision No.
|
Year
|
Production Target
|
Actual Production
|
2264
|
2002
|
2% by 2007 (and 1% increase every three years)
5% by 2016
10% by 2020
|
|
4450
|
2009
|
5% by 2014
10% by 2020
|
0.1% in 2009
|
3484
|
2011
|
Quotas have been set for the production of renewable energy from solar energy, wind, biomass, biogas, and waste
|
Until this resolution, no RE policy was set
|
542
|
2015
|
13% by 2025
17% by 2030
|
1.9% in 2014
|
465
|
2021
|
20% by 2025
30% by 2030
|
6% in 2019
9% in 2020
|
Although the first governmental target regarding RE generation was set in 2002, supporting policies or implementation strategies were not issued until 2011. In 2008, the Electricity Authority (the Israeli electricity regulator) allocated quotas for RE generation and provided FiT for each type of technology. Meeting these quotas was challenging because of the lengthy and complex facility planning process and permit approval procedures, and because the involvement of numerous stakeholders slowed down the construction process of the RE facilities [78–80]. The quota system was criticized by the State Comptroller as inadequate, and a 2012 governmental committee that examined the economic viability of integrating RE facilities recommended changing the quota system. However, only in early 2017, when the technology costs dramatically declined (mainly PV), the Electricity Authority moved to a price tenders' method. The Electricity Authority also made significant efforts to ease the bureaucratic processes [78].
Often, the reluctance of the Israeli government to sponsor new technologies inhibits the advancement of innovative proven technologies that are in their early deployment stages but are still expensive and therefore require financial support. In the RE field, this results in a bias against smaller facilities in urban areas, such as rooftops on commercial and public buildings, in favor of large projects over open lands [80]. However, years of low investments in transmission lines have led to insufficient transmission capacity, which does not support the operation of new large RE facilities in most areas of the country [81]. Improving the transmission infrastructure to accommodate distributed RE generation could take 5-15 years and this is likely to slow the pace of new RE installation and make Israel's goal of 30% RE by 2030 hard to achieve [82]. Recent policy papers suggest that energy storage in the existing transmission network could enable the connection of additional RE facilities in the near future, even before new transmission lines are built [81, 83].
While the RE generation in Israel is lagging behind many other OECD countries, the RE industry is positioned at the forefront in terms of innovation and groundbreaking technologies. However, bureaucratic barriers in the processes of allocation and licensing pilot and demonstration facilities, as well as financial difficulties, prevent the implementation of local innovative solutions in Israel, and inhibit their penetration to the international market [84].