The Solution that Might Have Been: Resolving Social Conflict in Deliberations about Future Electricity Grid Development

Abstract

Increasingly, local opposition to new electricity grid developments cause lengthy delays and places financial and practical strain on the projects. The structure of the electricity industry is in transition due to the emergence of smaller but more numerous generation facilities. Also, the wider society and local communities increasingly engage with energy and environmental issues. At the same time, the traditional decision making frameworks and processes are proving less effective in solving the present time conflicts between local communities and other stakeholders. This paper proposes an economic approach to resolve such conflicts. We discuss how compensation, benefit sharing, and property rights can have a role in reducing community opposition to grid development. However, we argue that these methods need to be part of an overarching policy towards conflict resolution in grid development. We then propose that such impacts can be addressed within a ‘weak’ versus ‘strong’ sustainability framework. Finally, we suggest that the concepts of ‘collective negotiation’ and ‘menu of options’ in regulatory economics can be adapted to operationalise the suggested sustainability-based approach to arrive at more efficient and socially desirable outcomes. The proposed framework can lead to the identification of socially acceptable outcomes that could otherwise have gone undetected.