Innovation in electricity distribution networks will be an important element in the transition to a sustainable low-carbon energy system. The nature of networks as regulated monopolies means that the locus of the evolution of protective space for innovation is regulatory institutions, and that the politics of creating protective space is the politics of institutional change. In this paper I examine the case of Britain, where protective space for research, development and demonstration projects was created over the course of the 2000s in the form of funding mechanisms within the regulatory regime. The case study is used to test structural and discursive theories of gradual institutional change. I conclude that these theoretical frameworks are consistent with the evidence, but that the characterisations of change actors and of dominant policy paradigms are insufficiently flexible. I also conclude that the framework for innovation in the British regulator remains incomplete.
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