Obliging Institutions and Industry Evolution: A Comparative Study of the German and UK Wind Energy Industries

This paper firstly examines the relationship between state coordination and wind energy growth by comparing the differences between UK and German institutional configurations and state involvements in the 1990s. While the EU was calling for a unified regulatory framework for its member states, the UK and Germany adopted very different renewable energy policies. The evidence of the early 1990s shows that the British government employed “deregulation” with so limited state involvement that wind energy project developers faced thorny development problems, while the German government tried to require the electricity supply industry to purchase expensive wind power by “regulation” but encountered formidable resistance. Nevertheless, both the British and German administrations later could resolve these problems through new forms of state power. This suggests that, firstly, neither “deregulation” nor “regulation” is an effective means to develop wind power with increasing electricity liberalization and regionalization. Secondly, “obliging” regulations and state powers are vital to the policy outcome by harnessing the state's institutional capacity to smooth out technology innovation and diffusion.