Decentralized electricity generation from renewable sources as a chance for local economic development: A qualitative study of two pioneer regions in Germany

Abstract

Background: Empirical research on the local economic effects associated with decentralized electricity generation from renewable sources has only just started. So far, most studies focus on quantifying economic effects and neglect the conditions and constellations which support and enable local economic development based on decentralized electricity generation. This, however, is the focus of this paper which looks at these issues, employing the value chain concept in combination with a governance perspective. Methods: Empirically, we take a qualitative approach and analyze two case studies of pioneer regions, in which decentralized electricity generation from renewable sources has developed very dynamically. The case study regions are Soltau, with a special focus on biogas production, and Emden, where wind energy plays a special role. Based on the early activities of some pioneers, these regions have developed specific actor constellations and organizational structures and have entered development paths in which renewable energies became an important economic factor. Results: The analysis highlights the importance of institutional context and supportive governance structures for an early advancement of decentralized electricity generation from renewable sources, with a key role of local actors and governance constellations. It also points to the importance of cooperative relationships among local business actors for creating a competitive advantage for (some) regional firms. Conclusions: Our analysis shows that with the geographical proliferation of electricity generation from renewable sources, specialized firms tend to reach beyond their regions, thus offering first-mover advantages for firms in pioneer regions in comparison with latecomers. © 2012 Klagge and Brocke; licensee Springer.