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This article shines a light on a less examined aspect of sustainable energy transitions: governing for demand side innovations in Germany. Demand innovations are considered to be central to affordable, efficient and politically acceptable energy system transformations, however many argue that not enough is being done in governance terms. In a departure from much analysis on demand policy demand innovations are defined broadly here to explicitly include demand side response, demand reduction and distributed energy – given that each has important roles to play within demand-oriented markets. Demand governance is conceptualised as a long-term political process that is both contextually specific but also open to challenge and change at various points in time. The single case study is Germany where demand governance, recent changes in energy markets, and implications for how the politics of energy are changing are all analysed. This paper reveals the specific ways in which critical policy debates emerge over time and influence political decision-making; the ways in which these debates relate to changes in energy markets; as well as a lack of governance in relation to enabling demand side response and local energy markets.

Improving the understanding of the politics of sustainable energy transitions has become a major focus for research. This paper builds on recent interest in institutionalist approaches to consider in some depth the agenda arising from a historical institutionalist perspective on such transitions. It is argued that historical institutionalism is a valuable complement to socio-technical systems approaches, offering tools for the explicit analysis of institutional dynamics that are present but implicit in the latter framework, opening up new questions and providing useful empirical material relevant for the study of the wider political contexts within which transitions are emerging. Deploying a number of core concepts including veto players, power, unintended consequences, and positive and negative feedback in a variety of ways, the paper explores research agendas in two broad areas: understanding diversity in transition outcomes in terms of the effects of different institutional arrangements, and the understanding of transitions in terms of institutional development and change. A range of issues are explored, including: the roles of electoral and political institutions, regulatory agencies, the creation of politically credible commitment to transition policies, power and incumbency, institutional systems and varieties of capitalism, sources of regime stability and instability, policy feedback effects, and types of gradual institutional change. The paper concludes with some observations on the potential and limitations of historical institutionalism, and briefly considers the question of whether there may be specific institutional configurations that would facilitate more rapid sustainable energy transitions.

This paper offers a new, interdisciplinary framework for the analysis of governing for sustainable energy system change by drawing together insights from, and offering critiques of, socio-technical transitions and new institutionalist concepts of change. Institutions of all kinds, including rules and norms within political and energy systems, tend to have path-dependent qualities that make them difficult to change, whereas we also know that profound change has occurred in the past. Current decisions to pursue climate change mitigation by dramatically changing how energy is produced and used depend to some extent on finding the right enabling conditions for such change. The approach adopted here reveals the highly political and contingent nature of attempts to govern for innovations, how political institutions mediate differently between forces for sustainable change and forces for continuity, as well as specific interactions between governance and practice change within energy systems. It concludes that it is only by being specific about the contingent nature of governing for innovations, and about how this affects practices in energy systems differently, that those of us interested in sustainability can credibly advise policy makers and drive for greater change.

•Provides a critique of concept of ‘regime resistance’ in analysis of sustainable energy transformations.•Provides in-depth analysis of energy company lobbying on formation of Capacity Market policy in Britain.•Shows evidence of incumbent influence and structural power over government.•Demonstrates incumbent power was contingent on interests, institutional context and ideas deployed.