Fraunhofer Institute for
Systems and Innovation Research ISI

Diffusion of innovations in energy efficiency and in climate change mitigation in the public and private sector


The German electricity sector has been subjected to dramatic changes over the past few years. The liberalization of the markets, the European CO₂ emission trading scheme as well as the promotion of renewable energies and co-generation represent specific challenges to actors in the energy sector. Municipal utilities are particularly affected by these partially contradictory developments: Market liberalization causes business consolidations, which require a cautious reorientation of their strategy. This throws up questions concerning autonomy, horizontal cooperation and vertical integration as well as their positioning in the field of energy efficiency and climate protection innovations.


Our research project focuses on diffusion processes of energy efficiency and climate protection innovations in the German energy sector. Based on three examples of innovative fields (renewable energies, micro-CHP/fuel cells, and contracting), the factors, actors and mechanisms are examined which promote or hinder these innovations. The main research question is: Under which conditions will municipal utilities and their customers invest in new energy technologies and energy services? We explore different determinants for the role of municipal utilities in the innovation fields: On the one hand the influence of liberalization and environmentally-oriented energy market regulations (German Renewable Energy Act (EEG), German Cogeneration Act (KWKG) and the CO₂ emission trading scheme) is considered. On the other hand, we explore the influence of the municipal utilities' strategic orientation ( for example with regard to vertical integration and other forms of business cooperations).

In cooperation with the German Research Institute for Public Administration, Speyer (FOEV), the Fraunhofer ISI intends to take a look at these questions. This will be done by referring to and integrating different theoretical approaches from sociology (neoinstitutionalism, network approach, rational choice and other theories of behaviour) and economics (innovation economics, transaction cost approach, industrial and regulatory economics). The heuristics of a sectoral innovation system serves as the framework to do so. The empirical base is made up of a written survey of all municipal utilities (March – May 2006), surveys of selected customer groups (hospitals, butchers) and interviews with other involved stakeholders from equipment manufacturers through power generators and distributors up to regulatory institutions. Context data from official statistics and associations are used in addition.

Alongside the evaluation of the individual surveys, it is planned to combine and link the data in a shared database. This serves as the first step for model-based analyses in which emergent properties of the overall system are to be linked with mechanisms and characteristics on the actor level. The results are to be subjected to an international comparison (UK, CH).


completed project (2005 – 2008)


Volkswagen Foundation


Research Institute for Public Administration, Speyer


Jansen, D.; Ostertag, K.; Walz, R. (Hrsg.) (2011): Sustainability Innovations in the Electricity Sector. Heidelberg, New York: Physica-Verlag.

Jansen, D.; Walz, R.; Ostertag, K. et al. (2007): Stadtwerke zwischen Liberalisierungsdruck und Umweltzielen – Der Beitrag lokaler Stromversorger zur Diffusion von Klimaschutz- und Energieeffizienzinnovationen. In Wengenroth, U.; Hof, H. (eds.): Innovationsforschung - Ansätze, Methoden, Grenzen und Perspektiven, LIT-Verlag.

Ostertag, K.; Hülsmann, F. (2007): Specialisation patterns in the energy service contracting market - Paper presented at the 9th IAEE European energy conference "Energy Markets and Sustainability in a Larger Europe", 10-13 June 2007, Florence.

Ostertag, K.; Glienke, N.; Rogge, K.; Jansen, D.; Barnekow, S.; Stoll, U. (2007): Local utilities, liberalisation and the EU emission trading scheme: Emerging strategies and their determinants. Konferenzpaper der 6. Conference of Applied Infrastructure Research, Berlin 2007

Gruber, E.; Ostertag, K.; Jansen, D.; Barnekow, S.; Stoll, U. (2008): Stadtwerke als Katalysator innovativer Energiekonzepte in mittelständischen Betrieben? In: Zeitschrift für Umweltpsychologie 1/08, S. 8-27