• Trust and Risk in Emerging Energy Infrastructures - The Smart Grid Vision

  • Doctoral student:Patrick Sumpf
  • Doctoral advisor:Prof. Dr. Matthias Kohring, Mannheim University
  • Start date:January 2013

Abstract

In modern societies, trust is an indispensable resource. It provides action capacity and gains relevance as a means of social cohesion to coordinate interactions among persons, organizations and overarching social entities. Specifically, trust towards abstract systems like expertise (science), money (economy) or ICT-structures (technology) are of particular importance (see Luhmann 1979; Giddens 1990). This can be illustrated vividly with regard to current developments in the energy sector: Largely in Europe (see the German “Energy Turn”), but also in the US and Asia, visions of establishing intelligent, connected and ICT-based energy infrastructures are prominent, detectable under the label of “smart grids” in numerous debates (Ramchurn et al. 2012). In this connection, the consumer is confronted with investing trust into the functioning of an abstract energy system (confidence) as well as novel technical applications (“smart meter”), markets and supervisory agencies. While until now, electricity was rather perceived as a permanently available resource driven by supply, a shift towards increased reflexivity regarding demands of active consumers (“Prosumer”; “Demand Side Management”) by political and economic actors seems evident, making new forms of trust readiness expectable among consumers. 

Trust, Distrust, Risk

Trust requirements of this kind, accumulating as action enabling component within increasingly opaque system developments as in the energy case, simultaneously create risk. In general, it is true that every act of trust is a risky investment as a consequence of fading out decisional contingency, acting as if the future was certain (Luhmann 1988). Moreover, it is particularly valid that risks emerge as a side effect of an intense increase in trust investment in domains, where non-transparencies, future uncertainties and competing business models and development paths are immensely contentious yet to be exploited as productively as possible (Strulik 2006). This is specifically true of the highly innovative sector of energy transformation, especially in Germany, where future contingencies are actively shaped and dealt with in countless scenarios and models of system constitution dependent on massive amounts of trust absorption. In this way, comparable to developments in the global financial system, trust may generate a unique risk dynamic by means of overdrawn trust dispense (“blind trust”), resulting from one-sided and factually delimited scopes of trust and confidence in system components such as markets (coordinating “Virtual Power Plants”), technologies (smart meters) or certificates (e.g. on ICT security).

The question of security as opposite of risk in future energy systems is therefore one encompassing the relation between trust and distrust: Trust evokes necessary action capacities to become involved in smart grid activities while distrust, as functional equivalent, retains mindfulness, discovers weaknesses (product and system flaws, flaws of business models) and therefore, at its best, leads to useful reforms in politics, economics and public matters (e.g. models of participation).

Research Questions and Methodical Approaches

So far, the PhD-Thesis seeks to frame its approach with a focused narrative of international smart grid development, within which the example of the German “Energy Turn” serves as a prominent example and major reference frame. Following this embedment, the analysis wants to tackle the most striking trust issues in emerging smart grid energy systems and point out their inherent risk dynamics and associated secondary problems (e.g. challenges of public trust communication, dynamics between politics and new markets, changing socio-technical constellations). All of this is scrutinized along the premise of certain realizations of the smart grid components in focus which are described and presented according to the predominant visions. So far, trust issues seem most relevant in the following realms comprising three case studies:

1)      Public acceptance of systemic energy transformations,

2)      The development of new electricity markets with potential dependencies on financial markets and derivative instruments (e.g. capacity markets),

3)      Restructuring of system responsibilities and roles between Transmission Service Operators (TSO) and Distribution Service Operators (DSO) in a changing governance framework.

In all empirical fields, the qualitative changes in modern energy systems are intended to be revealed by means of particular observation and reasonable expectation (e.g. by relying on experiences from the field of global finance). To achieve this, a comparison between the existing and emerging trust relations through a functional mapping and level analysis is envisaged in all three fields. As a first result, a “trust map” is supposed to arise, providing insight into the “trust architecture” of energy system components, building the basis for further proceedings. Systematically, emphasis is directed towards the relationship between trust and (systemic) risk, a concept under which the scrutiny of each case study is subjugated. This seems specifically fruitful against the background of targeting systemic trust in future energy systems, so that concrete risks can be derived as a consequence and/or source of particular trust problems and vice versa for each empirical field. As concrete methodology, a triangulation between functionalism, expert interviews and document analysis is intended.

Giddens, A. (1990): The Consequences of Modernity. Stanford: Stanford University Press.
Luhmann, N. (1988). Familiarity, confidence, trust: Problems and alternatives. In: Gambetta, D. (ed.), Trust: Making and breaking cooperative relations (pp. 94-107). Oxford, England: Basil Blackwell.
Luhmann, N. (2000 [zuerst 1968]): Vertrauen. Ein Mechanismus der Reduktion sozialer Komplexität. 4. Aufl. Stuttgart: Lucius & Lucius, UTB.
Ramchurn, S. D.; Vytelingum, P.; Rogers, A.; Jennings, N. R. (2012): Putting the 'Smarts' into the Smart Grid: A Grand Challenge for Artificial Intelligence. In: COMMUN ACM 55, 86–97.
Strulik, T. (2011): Vertrauen – Ein Ferment gesellschaftlicher Risikoproduktion. In: Erwägen, Wissen, Ethik, 22 (2011), Heft 2, 239-251.