Interviews

D&G ideas as a response to the challenges of the energy transition or how we came to love Baudrillard

Milos Mladenovic, SEEPEX

Photo: Miloš Mladenović

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June 13, 2024

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Published:

June 13, 2024

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After almost a decade since it was established and became operational, in February 2016, SEEPEX has definitely positioned itself, not only as an important milestone in the process of green transition and further liberalization of the electricity market in the Republic of Serbia, but also as an important integrative factor in the power exchange business in a broader context – regional and inter-regional, and it could be said even pan-European. Namely, after the first regional power exchange in the regions of Central and South-Eastern Europe – ADEX was established in December 2022 by corporate merging of SEEPEX and the Slovenian power exchange BSP, it was officially announced that the Hungarian power exchange HUPX will join that unique business infrastructure in 2024.

This development, the current situation and further directions of development of the European electricity market after the end of the dramatic energy crisis and consolidation of prices in 2024, with a slightly different look at the origin of the crisis, the reactions of EU officials embodied in the proposal for changes to the electricity market design , as well as further development trends, both in the energy market and the global economy, led us to Miloš Mladenović, the creator and Managing director of SEEPEX.

It could be said that SEEPEX, together with its ADEX Group partners, continues to push the boundaries and ensure the highest European standards in the field of power exchange business infrastructure, and in a way, it has resurrected its initial idea of forming a single regional power exchange.

Did you really believe in this kind of success during the preparations and the very establishment of SEEPEX or is this, perhaps an unexpected outcome for many, a consequence of general global trends and dramatic changes in the energy sector that we are witnessing?

This truly significant business success at the end of the first decade of SEEPEX was the cherry on the top of the company’s successful and profitable business operation; in just a few years, the company has profiled itself as a relevant, not only national, but also regional market place, with a fully rounded spot market framework (as it is known, an intraday spot trading segment was implemented last year), – with over 40 participants from 16 European countries and a volume of almost 5 TWh of electricity traded on the day-ahead market. It is important to note that these business results were achieved in the conditions of the so-called of “isolated” work, which is otherwise a unique case in the region, where all other power exchanges (including power exchanges from the EU environment) began to achieve such business and financial results only after the implementation of market coupling projects, and the significant increase in liquidity that they consequently brought.

As might be expected, all of this is the result of the belief in success and the commitment of all my colleagues who have participated in the establishment and operation of the company, not only from SEEPEX and EMS, but broader, including our EU partners and local institutions that helped us in with the necessary, and on a few occasions systemic, interventions on amendments to energy, market and financial legislation. But, above all, I would say, it is the fruit of a clearly set, far-reaching vision of SEEPEX as a modern European power exchange that will operate with a clear and undeniable regional perspective, fully in accordance with the best European practice.

SEEPEX was from the very beginning very ambitiously designed in line with the model of the pan-European electricity exchange EPEX SPOT

It is worth reminding that SEEPEX, both in terms of the business model and in terms of strategic striving and long-term aspirations, was from the very beginning very ambitiously designed in line with the model of the pan-European electricity exchange EPEX SPOT, otherwise our initial and very important strategic partner, without any compromises regarding the (un)readiness of the legal-regulatory and market framework in Serbia and the region.

It could be objected at the very beginning, and there were dissonant tones in that sense when the future business model was designed and presented, that it is pretty brave to appear with such a concept in the existing rather rudimentary market framework, with a very pronounced dominant, almost monopolistic, role of EPS on the market and in a very rigidly regulated financial framework, with the idea to apply in our country the model of the most modern power exchange infrastructure, not only in terms of the market platform, but also in terms of the spot clearing infrastructure, which did not exist in our banking and financial environment. However, at least for now, it turned out to be very fruitful.

The establishment of ADEX, with the corporate association of the Serbian, Slovenian and Hungarian power exchanges, was really a significant step forward in the region. What is the importance of this joint power exchange for all three parties and what are the further plans?

As you have already indicated in your question, the importance of the successful implementation of this demanding project is truly multifaceted, not only in the field of the electricity market, security of supply, and more efficient integration of renewable energy sources, but also in the strategic, and even the geo-political plan, primarily in the context of our integrative activities towards the EU.

The first phase of the BlueSky project was successfully implemented through the corporate integration of the Serbian and Slovenian stock exchanges and the establishment of the ADEX Group in 2022, and in 2023 the negotiations with the Hungarian partners were successfully concluded when the document on HUPX’s accession to the unified business infrastructure was signed

As it is known, the BlueSky project was initiated in 2017 by SEEPEX and its founders (EMS and EPEX SPOT), as a vehicle for executing the SEEPEX initial vision of establishing a regional power exchange, and turning to partners from the EU is a consequence of insufficient understanding of political structures from the neighboring countries that were our natural and first partners in this dialogue. The implementation of the project was designed in two phases; the first phase, the corporate integration of the Serbian and Slovenian power exchanges and the establishment of the ADEX Group, was successfully completed in December 2022, while negotiations with Hungarian partners were also successfully completed in the last year, and the transaction document on the accession of HUPX to this unique business infrastructure was signed in December 2023.

The first practical results of the planned ADEX synergy were already achieved after a few months, by establishing an intraday market in the Republic of Serbia at the end of July last year, and last month we have also successfully completed the process of transforming the business model of the BSP South Pool Energy Exchange, in such a way that the clearing function and the platform for day-ahead trading are harmonized with the SEEPEX business model, i.e. with the best European practice applied in all EPEX SPOT markets. With the introduction of a unique membership process and the price list, as well as harmonized market rules, all participants in the Serbian and Slovenian spot market (and, hopefully soon, in the Hungarian spot market as well) will have the “one-stop shop” solution, with all the accompanying benefits of such a solution at their disposal (harmonized business and clearing infrastructure, netting and cross-margining of collateral, a single procedure and reduced costs of accessing the spot markets), with the planned further strengthening of that synergy and with Hungarian partners in the near future.

The establishment of an intraday spot market on the Serbian electricity exchange is recognized as one of the most important prerequisites for the efficient integration of renewable sources of electricity

As for the Serbian market itself, it is known that the establishment of the intraday spot market is recognized in the legal framework as one of the most important preconditions for the efficient integration of renewable sources of electricity and the successful implementation of a new incentive scheme based on auctions for the conclusion of long-term financial power offtake agreements (the so-called Contracts for Differences – CfD’s), and where the contracting party responsible for the realization of those fifteen-year financial contracts, on the side of the state, would be the guaranteed supplier (EPS), while the physical delivery of the produced energy and the balance responsibility would have to be the obligation of the producers themselves.

As might be expected, the role of SEEPEX in the model of incentive measures is much broader, primarily in the context of providing a relevant and robust reference price the mentioned financial agreements refer to, as well as in ensuring a sufficiently liquid day-ahead market that has the capacities to accept all the quantity of produced energy without a significant impact on the price. Having all these in mind we can now safely claim that, with these latest improvements, that complex market puzzle has been successfully completed and can effectively respond to all the challenges the green transition imposes on the electricity market, and therefore support planned actions of state institutions, aimed at achieving the proclaimed, very demanding goals of the Integrated National Energy and Climate Plan.

SEEPEX
Photo: SEEPEX GO-LIVE, Belgrade, February 16, 2016

We know that SEEPEX, being the operator of the organized electricity market in Serbia, plays an important role in the liberalization of the national electricity market and in achieving the proclaimed goals of the green transition, and that it has also played a very important role in ensuring security of supply during the past energy crisis and in the functioning of the market in, one might say, critical regimes. In the aftermath, what is your opinion on the causes and consequences of that crisis, as well as on the possible lessons learned and on the response of the European institutions, primarily referring to the European Commission and the proposed changes to the market design?

We can say that SEEPEX, like other European energy exchanges, in those difficult regimes during the energy crisis have only confirmed the multiple importance of establishing a transparent and efficient marketplace, which also has the capacity to provide full security and financial protection to all market players, even in such high-risk business conditions that the entire sector faced. In addition, and this is one of the conclusions of the European Commission in the proposed measures to improve the design of the single European market, robust reference prices based on the principle of marginal prices are the only effective instrument that, in addition to the already known benefits that I would not elaborate further, can also serve as an alarm and initiate particular changes and actions, so that similar situations and challenges do not repeat themselves in the future.

The new market design should achieve two goals: greater price stability over a longer time frame, as well as more efficient integration of renewable energy sources into the system

The proposal for a new market design, which was finally shaped in mid-2023, after a long debate between all stakeholders, was certainly initiated by the last energy crisis and enormously high prices, but essentially represents a response to the growing challenges and perceived flaws, in some cases we could say economic illogic, a very steep green transition that we have been in for a long time. In short, the proposed measures can be sublimated into two categories, i.e. the two most important goals: greater price resilience over a longer time frame, both for consumers and suppliers, as well as more efficient integration of renewable energy sources into the system, primarily through the implementation of decentralized flexible solutions, such as demand side responce and electricity storage. In addition, several other specific measures to improve the market design need to be mentioned, such as defining long-term PPA’s as preferable and the only acceptable measures to support the further development of renewable energy sources (a concept that, let me remind you, we have already implemented in Serbia through auctions held last year), emphasis on further development, greater market share of long-term corporate PPA’s, and more active participation of the consumption segment in the market through the implementation of the concept of smart grids, prosumers, and demand side responce.

Mladenović: As a matter of fact, this was certainly not the first, and it certainly won’t be the last crisis that the energy sector

As a matter of fact, this was certainly not the first, and it certainly won’t be the last crisis that the energy sector, and perhaps in this last case it is more correct to say the global energy market, will face. We know that the world was going through similar situations in the 70s;  they were primarily caused by geostrategic reasons, we could also add lack of full understanding of the social circumstances in which we live, due to the absence of interaction between socio-philosophical and cybernetic-technological development, (the oil crisis caused in 1973 by OPEC’s decision to impose an oil embargo on Western countries due to their support to Israel in the Yom Kippur War, and the oil crisis at the end of the 70s after the Islamic Revolution in Iran), as well as in the early nineties, after the interruption of oil supply from the Persian Gulf region caused by the Iraqi invasion of Kuwait and the subsequent Gulf War.

The common denominator for all these crises is an inadequate response of the market and relevant decision makers as well as increase in the prices of energy

After that, at the beginning of the new millennium, we had the 2000–2001 California electricity crisis, local in scope but far-reaching in systemic consequences, which, in fact, represented the collapse of the neo-liberal market model and thus fully exposed all the weaknesses in the design of a fully liberalized and deregulated electricity market, and then encouraged particular, insufficiently thorough as it turned out later, reforms to improve the market transparency, reliability, and consumer protection. The common denominator for all these crises is an inadequate response of the market and relevant decision makers, i.e. politicians, as well as the consequent increase in the prices of energy products and goods (oil, electricity and gas) which, after the end of those crises, as a rule, did not return to the previous level. This is the case even today in the electricity market, where we are witnessing the consolidation of price levels at a significantly higher level than before the crisis.

However, what is even more interesting and, by the nature of things, it slips under the radar is that, not only the above crises, but also increasingly important turning points in the perception and the way of functioning of the economy, and therefore the energy market as its essential segment, have been announced years earlier in the reflections and works of modern thinkers, sociologists and philosophers above all, who have anticipated numerous phenomena and even their consequences, much earlier than they would become part of public discourse and legislation and business practice; unfortunately, this did not find an adequate and timely understanding on the side of political elites and decision-makers.

Can you explain this last premise a little, how can we respond, not only to the systemic, but also to the existing operational challenges the new energy environment carries, and whether we can respond by expanding the discussion to a wider public discourse and taking into consideration the progress in other areas of social action?

It is certainly not realistic to expect the bureaucrats in Brussels or the technocrats at the head of large corporations to have an ear and understanding, at that sociological-philosophical level, for anything other than the simplified Fukuyama[1] theory about the “end of history”, and supposed triumph of neoliberal democracy and fully liberalized market (if we assume benevolently that they may also be familiar with it), but a proper evaluation of more contemporary philosophical discourses, already applied in practice, (notably through the digital economy and decentralized block-chain infrastructure, and if we go back in time a bit, through the emergence of the Internet as the embodiment of the concept of decentralization, rhizomatic structure and nomadic nature of the subjectivity of Deleuze[2]  and Guattari[3]) would certainly help in a better understanding of our contemporary economic reality.

If we were to step away from post-structuralism in its narrow sense and move towards a broader postmodern context and deeply deconstruct the political and social conditions from the beginning of the nineties onwards (looking only at the post-Fukuyama era), we come to the notion and recognition of hyper-realities where, looking at things from a Baudrillardian[4]  perspective, we could say that the strictly market value mantra, or the “commodification” of energy, obscures social and ecological realities, and in a broader context, it contributes to further uncontrolled production and spreading of simulated experiences.

While from Fukuyama’s point of view, it could be said that the liberalization of the power sector is a distinct culmination of historical progress towards liberal democratic ideals, where the privatization of vertically integrated, in most cases, state-owned enterprises encourages the freedom and prosperity of the individual, from a Baudrillardian (much closer to me) perspective, that liberalization of the energy sector, and the current techno-cyber transition as a whole, could be seen as part of a wider process of social simulation, where the purely market value of energy as a commodity eclipses its use value, which further leads to the loss of authentic human experience and connection with the world of nature.

Every energy crisis significantly increases global existential anxiety

If we put all of this in the context of Baudrillard’s postmodern ethics, we can also conclude that every energy crisis, along with the obligatory appearance of growth and the accompanying high volatility of electricity prices (which is still there after the current crisis), significantly increases global existential anxiety and uncertainty around energy consumption, resource scarcity, and environmental degradation, while further commodification of energy and the abstraction of its value on financial markets, apart from the purely economic consequences due to speculative and other financial risks, can worsen the feeling of disconnection and alienation from the world of nature.

Energy crises, along with the still present and insufficiently controlled depletion of resources, can be seen as symbols of Baudrillard’s hyper-reality, reflecting the fragility of human civilization in the face of technological, ecological and socio-political disturbances

Hence, even the energy crises, with the still present and insufficiently controlled depletion of resources, can be seen as symbols of Baudrillard’s hyper-reality, reflecting the fragility of human civilization in the face of technological, ecological and socio-political disruptions, while, on the other hand, the acceptance and the practical implementation of the principles of environmental sustainability, resilience, and community empowerment, can offer ways to navigate through the complexity of the postmodern world, while simultaneously mitigating the risks of energy insecurity and environmental degradation.

Additionally, we can also go a little further into the past in this consideration, and touch on the existentialist philosophers like Sartre[5] or Nietzsche[6]  who have explored the topics of individual freedom, authenticity, and the human condition faced with technological progress and social changes. Namely, taking into account the experiences not only from the third world, but also the increasing risk of energy unaffordability for one stratum of the population and in developed countries, philosophical considerations of justice, equity and distribution of resources can reasonably serve as a basis for criticism of deregulation and liberalization policies that are currently in force. Accordingly, it will inevitably lead to the proposals for alternative approaches, so reflections on the role of individuals in technologically mediated societies could only stimulate comprehensive discussions on the implications of such a steep technological transition on human action and existential fulfillment.

Mladenović: There must be a complete change of paradigms and abandonment of certain dogmas of neoliberal capitalism

All in all, looking at a slightly wider context that, without a doubt, also includes the modern achievements of the humanities, it is clear that there must be a complete change of paradigms, and the abandonment of certain dogmas of neoliberal capitalism, which, for the last three decades, have been accepted in most of the world as the undeniable truth. While Baudrillard and Fukuyama, if we focus only on them, offer in their views opposite perspectives of the further directions of the development of society or, specifically in our case, the transition of the energy sector, their views highlight broader philosophical debates about the nature of society, the reality, and general civilizational progress, so that only a proper evaluation of these different points of view can enrich discussions about the social, economic and ecological implications of further liberalization, or possible de-liberalization, course changes in the further development and inevitable transition of the energy sector.

However, it seems that things are changing in that field as well. We know that the European Commission, in its latest proposal to improve the design of the market, among other things, clearly apostrophized the need for a faster green transition and further decentralization of the energy sector, among other things, through defining specific incentive measures in the form of auctions for concluding long-term PPA’s, larger flexibility of the market model, and more efficient consumer protection?

We have to admit that the proposed measures are certainly correct, however they are too limited and to a great extent late, so their scope on the essential level cannot be seen with certainty, where the cause is, I will emphasize again, above all in the insufficient understanding of the drama of the socio-philosophical moment in which we find ourselves, and in particular neoliberal blindness to the essence and value of energy as such, i.e. its impact on the ongoing sociological transition.

In this context, let me go back to Mumford’s[7] theory where the history of energy use, after the mastery of fire for heat and cooking, can be roughly divided into three epochs. The Eotechnic epoch revolved around wood, wind and animal power, where people, in addition to cooking and preparing food, learned to use the wind for navigation and providing rotational power used for irrigation and grinding grains, and animal power for tillage and transport. It is followed by the Paleotechnic epoch , initiated by the industrial revolution, where the use of coal and steam engines opened up, and made available much greater energy resources than before, enabling more mass production, as well as much more extensive and faster transportation of goods. Finally, the Neotechnic epoch , i.e. the modern era of oil, electricity and nuclear power includes a further increase in available energy resources, as well as their more refined use, leading to energy sources becoming diversified and better adapted to a specific purpose.

Three eras of energy use: eotechnical, paleotechnical and neotechnical

These epochs are interrupted, not only by technological, but also by sociological revolutions, which we can also interpret as less visible but continuously present flows parallel to the energy transitions, so that Mumford deals with these transitions in the context of the fact that they coincided with radical changes in society: the dynamics of Eotechnical society is very different, or much slower than the dynamics of the Paleotechnical society, which is again incomparably slower than the dynamics of the Neotechnical society in which we are currently, or in which we were until recently. With all this in mind, the ongoing energy (“green”) transition is not only an energy or economic transition, but also a moment of clear and pronounced social change.

Such changes can be explored in many different ways, each emphasizing different aspects of the complex connections between energy use and society, where the focus must be on the direct relationships between the forms of the energy system and the artefacts we deal with, on the one hand, and energy practices, on the other, or the market models that we develop on the other hand. What is characteristic of today’s moment is that, for a decade now, we have been in the vortex of a new technological revolution, or the green transition if we are talking exclusively in the context of energy, which by all its characteristics and specifics can represent the beginning of a new, post-neotechnical era.

This is certainly a very interesting and fresh point of view on this topic, but we know that, in addition to the systemic ones, the green transition brought many operational challenges, such as, for example, the variability of the production of energy from renewable sources and the balancing problem. Can we also look at the practical aspects through this broader prism?

If we want to deal with the causes and anticipation of problems, and not just the consequences and damage control, as energy policy makers do in most cases, it is clear that only an empirically based philosophical perspective can offer some clarity regarding the specific problems of the energy transition, which, finally, also treats the new design of the market. As a very obvious example, we can also cite the problem that you apostrophized in the question, i.e. the problem of intermittency and insufficient predictability of power production from renewable energy sources, which was recognized from the very beginning as one of the biggest challenges for their mass integration and smooth operation, i.e. maintaining the entropy of the entire power system.

It is known that even Heidegger believed that energy can be conceptualized simultaneously as a flux and as a potential

It is known that even Heidegger[8] believed that energy can be conceptualized simultaneously as a flux and as a potential, and that there is a continuous tension between these two phenomena. Energy is “flux” when it flows, works, is used, affects changes, and on the other hand, it is “potential” when it is stored, available, waiting to be used. In this context, it can be said that the problem of intermittency arises because the energy of renewable sources, primarily wind and sun, appears as a pure flux, in contrast to fossil fuels which are constantly present as a potential, and partly because the techno-political elites keep the problem solving of this continuous collision between flux and potential beyond the reach of the consumers themselves, who still perceive energy as a pure potential available at the click of a switch.

Therefore, we still have the latent problem of the so-called “experience gap”, in which the invisibility and abstractness of a large part of the electric power system comes to the fore from the consumer’s point of view, and because of which the consumer himself cannot build an ethical relationship towards consumption itself, because for him, when he presses the switch, at the purely symbolic, or we could even say semiotic, level, the light bulb “lights up by itself” and without any visible interaction with the environment.

Bearing all that in mind, it is possible that Mumford’s theory of three epochs in energy use, with the corresponding transition triggers closely linked with the socio-philosophical reality, opens up space for a solution to the problem of intermittency and more efficient integration of renewable energy sources in the system, outside of, or in synergy with, the currently popular but expensive solutions for energy storage, and application of complex solutions through the so-called “smart grids” or implementation of an innovative flexibility market models (demand side responce, “peer-to-peer”, etc.).

The task for the engineers and policy creators is not only to fit and integrate renewable energy sources into the current energy system, but above all to design a system that is both sustainable and meets basic human needs

Certainly, the problem is not exclusively of a technical nature related only to the balancing of generation and load within the system, as is often simplified, rather it is about the compatibility between the use of energy by the society and the behavior of the source, i.e. the energy system that provides that energy. The two sides of this system have co-evolved in history, and all the attempts to change the generation side, to adapt to the greater impact of the intermittency of renewable sources, while leaving consumption (essentially) as it is, not only gave no results, but it represented solutions to a misunderstood problem. Because of all this, the task for the engineers and policy creators is not only to fit and integrate renewable energy sources into the current energy system, but above all to design a system that is both sustainable and meets basic human needs.

Don’t you think that this topic and a particular paradigm shift in the understanding of the concept and role of consumption, at least declaratively, has already been successfully recognized and addressed through a kind of decentralization of the power system, embodied in the increasingly massive appearance of prosumers, the establishment of the concept of manageable consumption and storage of electricity?

You are right to a certain extent, but those positions were reached primarily through empirical action and without any deeper reflection. Namely, as already mentioned, the phenomenology of electricity consumption itself cannot be viewed separately from the consumer’s ability to develop an ethical position on the issue. Although it is not directly referenced in that way, we can also look at that topic in the light of Foucault’s[9] work on “self-practices”, in which it is argued that ethical behavior can only be built from a relationship with a morally relevant environment. As already mentioned, the complex and non-transparent electrical grid, a kind of “black box” from the consumer’s point of view, therefore makes “ethical consumption” particularly difficult. Simpler and more understandable energy systems could enable ethical engagement, but probably at the cost of the reduced efficiency of the system itself, therefore, a carefully balanced solution must be found here as well.

It is very important to correctly recognize and value two valid concepts of energy consumption: the principle of “boundless consumerism” and the modern approach of eco-frugality

In addition, it is very important to correctly recognize and valorize two valid concepts of energy consumption, to be distinguish in these debates: the principle of “boundless consumerism” (as one of the pillars of neo-liberal capitalism) which claims that further economic growth will be possible through the improvement of efficiency and the introduction of novel technologies, and the modern approach of “eco-frugality” which claims that, instead, consumption should be radically reduced, making energy conservation a central aspect of our lives, but above all directed towards the preservation of the environment and the implementation of the so-called “green agenda”. A third approach should be introduced in that discussion, because not only must society remain interested in a sustainable energy system, but the complete system should meet society’s needs and allow people to thrive as human beings.

As a matter of fact, we have witnessed that the principle of “boundless consumerism” has already proven to be ineffective: during the last half century, growing energy consumption has not led to a greater subjective well-being and feelings of happiness, even in the Western world, which has uncritically adopted this premise as an axiom. On the other hand, eco-frugality directs our attention to the Protestant ethic, which, objectively speaking and without the need to quote Weber[10], is not attractive to anyone, primarily because it does not touch on the topic of prosperity, and if we look at it on a metaphysical level, it does not even offer hope in the happiness that will come in the afterlife if life is focused on virtues and not only on success and the acquisition of material goods. Through the introduction of the third approach, the so-called of “qualitative abundance” (centered on how energy contributes to prosperity and well-being), discussions of the energy transition can be broadened to include concerns about prosperity, in addition to traditional concerns about affordability. This expansion of the debate opens up a space where ways to reduce consumption and rational use of energy can be discussed, while simultaneously improving overall social welfare.

Discussions on the energy transition can be broadened to include concerns about prosperity, in addition to traditional concerns about affordability

As for the need for more active demand participation in the market, or the transition from the traditional passive to the role of an active market participant, which is also one of the recommendations of the European Commission in the proposal of new measures to improve the market design, is practically the legitimization of the idea of ultimate decentralization, i.e. the democratization of the economy, which has not only been present in public discourse for several decades, but also represents the center of the digital economy universe that even the biggest skeptics can no longer ignore.

The democratization of the economy in the context of the electric power market implies further application of the concept of marginal prices on energy exchanges

In its essence, and to a large extent based on the ideas of post-structuralists, above all, the already mentioned Deleuze and Guattari (D&G) and their concept of decentralization, rhizomatic structures and the nomadic and fluid nature of subjectivity, the democratization of the economy in the context of the electricity market implies, before all, further application of the concept of marginal prices on energy exchanges, which implies the voluntary participation of participants and the “democratic disclosure of reference prices”, as well as the decentralization of energy systems and introduction of distributed energy resources, with implicit empowerment of individuals through the so-called energy communities, in order to have the greatest influence on the fairest possible allocation, distribution and management of economic resources.

The democratization of energy is not a unique solution, but includes various strategies and reforms aimed at fostering a fairer and more participatory economic system, thereby significantly contributing to the resilience and sustainability of all its factors

Although the democratization of the economy, i.e. democratization of energy in our context, is certainly not a unique solution, it includes various strategies and reforms aimed at fostering a fairer and more participatory economic system, thereby significantly contributing to the resilience and sustainability of all its factors, as well as particularly significant factors in the conditions of the ongoing green transition of the energy sector. In addition, there are clear benefits on the sociological level as well, given that the democratization of the economy is in complete accordance with the basic principles of democracy, such as equality, freedom and the active participation of the individual in socio-economic processes, however, on the other hand, it should also be said that this process carries many challenges and compromises, such as balancing individual autonomy with collective decision-making, managing competing interests and priorities, as well as managing complex economic dynamics. Because of all that, the implementation of policies and reforms for the democratization of the economy, in addition to the comprehensive and layered understanding of the concept itself and all its specifics, it requires thoughtful planning, engagement of stakeholders and continuous evaluation, to ensure effectiveness and accountability.

Many would say that all of the above looks quite nice on paper, but that, even in developed European countries, this concept is much more present on political platforms, primarily of the “green” parties, than in economic practice. What can be the base for optimism that a more comprehensive introduction of the concept of decentralization, and in a broader sense, democratization in the energy sector is the right way to solve all challenges?

To defend that premise, we can refer to the experiences in the energy sector we have learned from so far; we are witnessing the massive development and expansion of the prosumer concept, as well as serious investments in the field of implementing the smart grids and innovative decentralized solutions in the field of flexibility market (with an accent on and application of the block-chain technology, as an intruder from the digital world), as well as positive examples from other areas of socio-economic activity, primarily in the sphere of the digital economy as the fastest growing alternative market universe (it is estimated that the current total market capitalization of cryptocurrencies has exceeded three trillion dollars, with the market share of bitcoin at the level of about 40%).

As the simplest explanation, we can cite a slightly trivial, but to a large extent well-founded, premise that the main reason for the enormous capitalization and resilience of bitcoin is that, contrary to critics who persistently call it a bubble that is about to burst, it only manifests itself in the real economy as new materiality, a digital form of electricity, transformed through the so-called “proof of work” algorithm from the real world to the digital sphera, so that electricity represents an “underlying asset” that, similar to financial futures contracts, ensures its use value, not only on a practical, but also on a symbolic-semiotic level. On the other hand, if we are looking for the real roots of such a dramatic change in the perception of the economy on a global level, we would again come to the works of Deleuze and Guattari (D&G), citing as the most significant example their joint work “Capitalism and Schizophrenia”, a two-volume study on capitalism and the relationship between capitalism and schizophrenia, which had a significant impact on various aspects of contemporary thought.

Deleuze, Gilles and Félix Guattari “Capitalism and Schizophrenia”

The paper examines the status of desires as libido, where, unlike Freud,[11] the Oedipus complex is not a formation of the unconscious itself, but an apparatus for suppressing the “desiring-machine” (the concept of the unconscious as a machine), with a critique of the operation and deep rootedness of psychoanalysis in capitalist society and its inability to understand its own schizophrenic basis (introduction of the concept of so-called “schizoanalysis”, whose starting point is found in military-libido-economic and libido-political analyses, and which can be found at the basis of the analysis, not only of fascism, but also of many right-wing derivatives of postmodern neo-liberal arrangements).

D&G believe that the social field is invested in two ways: preconscious investment by interests and unconscious investment by desire, and that basic concept of “desire” (libido) and “desiring machines” offers an insight into the dynamics of consumption and production that can easily be mapped to the economy and all its areas

D&G believe that the social field is invested in two ways: preconscious investment by interests and unconscious investment by desire, and that basic concept of “desire” (libido) and “desiring machines” offers an insight into the dynamics of consumption and production that can easily be mapped to the economy and all its areas. They also claim that desire is productive and creative, that it drives the processes of consumption, production and innovation. In the digital economy, for example, platforms use the users’ wishes and preferences to personalize the content, target ads and optimize the user experience. The attention economy, fueled by user engagement and data-driven algorithms, harnesses desires for attention, validation, and connection to drive economic value in digital ecosystems.

D&G are the first to introduce the concept of the so-called “rhizomatic structures”, as an alternative to hierarchical and centralized organizations

Also, D&G are the first to introduce the concept of the so-called “rhizomatic structures”, as an alternative to hierarchical and centralized organizations. Rhizomatous structures are non-linear, decentralized networks characterized by multiple entry points, connections and multiplicity. This idea has been applied to digital technologies and networks, such as the Internet, where information flows in a decentralized manner, without a single point of control.

Decentralized energy systems, such as microgrids, distributed generation and the ever-present platforms for “peer-to-peer” energy trading (without a mediator, i.e. a central contracting party), embody rhizomatic structures enabling flexible, adaptable and resilient energy grids

Decentralized digital platforms and technologies, including blockchain and peer-to-peer networks, embody rhizomatic structures, enabling distributed governance, collaboration and innovation in the digital economy. In the context of the energy sector, decentralization involves distributing energy production, as well as distribution and management across different and interconnected nodes, rather than relying on centralized power plants and grids. Decentralized energy systems, such as microgrids, distributed generation and the ever-present platforms for “peer-to-peer” energy trading (without a mediator, i.e. a central contracting party), embody rhizomatic structures enabling flexible, adaptable and resilient energy grids.

In addition, decentralization in the energy sector involves harnessing collective desires for energy sovereignty, environmental sustainability and community resilience to shape energy policies, technologies, and practices, while the desire for decentralized energy solutions motivates the adoption of community-owned renewable energy projects, energy communities and local energy initiatives that give priority to democratic decision-making and local autonomy (let me remind you that the concept of “energy communities” has recently been introduced into the official EU legislation).

In addition, D&G strongly emphasize the nomadic and fluid nature of subjectivity, identity, and social relations in their work. They argue against fixed identities and rigid structures, arguing for a fluid, processual understanding of reality. In the digital economy, for example, this notion of fluidity manifests itself in the flexibility and mobility provided by digital technologies, such as telecommuting, digital nomadism, and borderless online communities. Digital platforms and markets facilitate the fluid exchange of goods, services, and information across geographical and cultural boundaries, challenging traditional notions of space, time, and identity.

Decentralized energy resources exhibit characteristics of nomadic subjectivity through the need to decentralize energy production and consumption

Mapped to the energy sector, distributed, or decentralized energy resources (DER) exhibit characteristics of nomadic subjectivity through the need to decentralize energy production and consumption, enabling individuals and communities to participate in energy markets and decision-making processes. Cascading, therefore, the premise of the nomadic nature of subjectivity into an acceptable and widespread business practice, DERs owned by prosumers or active customers, such as rooftop solar panels and energy storage systems, enable individuals to become active participants in the energy transition, moving from passive consumers to consumers who produce, store and trade electricity.

And last, but certainly not least, D&G introduce the concept of “deterritorialization”, which treats the relationship between territory (in the broadest sense of the word, in the context of our topic it can also be a socio-economic system or, narrowly speaking, a market model in which the processes take place) and what the territory “allows” for subjects, or “bodies” within that territory. Territory affects what bodies have the capacity do, according to a precisely defined or implicit set of concepts, expectations and actions (they often call them “codes”). When a particular space is deterritorialized, these codes are canceled, and the territorial order of the body abandons its stability and enters a chaotic mix of movements, exhibiting temporary, incomprehensible patterns (bodies are “decoded” when space is “deterritorialized”).

In this way, bodies find a new order, they are “recoded”, get the order of what is reasonable, and establish a new stability in their movement patterns, their behavior within the system. In neoliberal capitalism, capital flows deterritorialize the overall socio-economic space by removing (decoding) local and subjective feelings of value and social relations, and then reterritorializing that same space in a way that will support and facilitate free capital flows, essentially recoding local cultures of society’s behavior into a neoliberal inherently nihilistic value system.

Even if in earlier social systems culture was “incompatible” with capital, capitalism has no problem creating “axioms” for new subjects/bodies (as labor), environment (as private property) and natural entities, or processes (as commodities), which mutate their flows for the purpose of the effort and desire of capital to overcome its internal limitations and contradictions, by further expanding and constantly decoding our desire, and ultimately recoding our inner essence to new patterns of capital. Here we see a connection with the “production of desire” as what is required by a given society (“the production of desire is social production”) and at the same time as a given system or zone within it is reterritorialized, new patterns appear, and new connections between bodies are positively connected, which again leads to inevitable changes in paradigms and basic principles of the functioning of the economy and society.

At the end of it all, what could we conclude, do you think that the necessary fundamental changes will really occur and how do you see the further development of the energy market, and SEEPEX itself, at that broader level?

The real question is what would happen if we “desired” differently, or if it happens, for example, that the cosmetic interventions to the existing market design proposed by the European Commission are not enough to satisfy the “desire” of Western society for a paradigm shift? In its previous mutations, neoliberal capitalism shows us that we can extend the “desire” beyond the given social arrangement, even to the one that does not yet exist (illustrated every day by the never ending decoding/recoding of socio-economic reality, so that we do not return to the example of digital economy as a completely revolutionary, “techno-cyber social order”), but capital simultaneously prevents us from desiring what is possible (or what is practically imaginable, given our current degrees of freedom), in such a way that the numbing logic of money and “boundless consumerism” overcodes the given society. In essence, and in order to be able to achieve some revolutionary progress that would at least alleviate, if not abolish, the growing global economic anxiety and numerous social illogicalities, the task of the new era would be to decode the traditional neoliberal value system, so that it could then be reterritorialized into some new world.

Because of all of the above, and not only because of that, we can state without any doubt that, although the work of Deleuze and Guattari, as well as other post-structuralists and postmodern philosophers, does not deal directly with the economy, and certainly not directly with the energy sector, their philosophical concepts provide valuable insight into the principles and dynamics of efforts for overall decentralization and democratization of the economy. There, naturally, we must once again specifically apostrophize the concepts related to decentralization, rhizomatic structures, as well as deterritorialization and the nomadic nature of subjectivity, which had a decisive influence on the discussions, and then on the applied solutions in various areas, representing the foundations for the development of digital technology as a whole and with the Internet as a kind of climax, the practical embodiment of their philosophical thought.

By applying D&G ideas in the context of the energy sector, policy makers, researchers and practitioners can develop more nuanced and holistic approaches to decentralized energy systems that prioritize resilience, sustainability, and impartiality

All this, of course, consequently supported the emergence of awareness of the need for decentralization and democratization of the entire economy, and thus indirectly the energy sector as its essential segment. Although their work does not deal directly with energy policy or decentralized energy systems, the proposed conceptual framework provides insight into the principles and dynamics underlying the decentralization efforts in the energy sector as well. By applying these ideas in the context of the energy sector, policy makers, researchers and practitioners can develop more nuanced and holistic approaches to decentralized energy systems that prioritize resilience, sustainability, and impartiality, and that will certainly be a cornerstone in the future towards the realization of the idea of a final and fully green transition, as a path towards a sustainable and resilient society of justice and social equality.

Accordingly, it is natural and inevitable that the energy market, as well as all the factors of its complex “value chain”, will have to be ready for a steeper transition and faster changes, with an agile approach to managing those changes and controlling the accompanying and inevitable risks, as the crises like this last one would not be repeated again and again.

SEEPEX at least for a single step of the economic-political reality

As far as SEEPEX is concerned, as well as other facilitators of the existing deregulated energy environment (such as energy regulators or transmission and distribution system operators), it would be very important to timely anticipate the coming, not only economic, but also social trends and, to always be ahead, at least for a single step, of the economic-political reality (which, it must be said, SEEPEX has successfully done since its inception, at least in the local context), so that the transition would be carried out in the most efficient and, ultimately, the more comfort way.

Otherwise, in addition to occasional crises that will inevitably occur, with smaller or larger impacts on the complete entropy of the global political and socio-economic order, the next phase of society’s development could be the entry into the phase of uncontrolled accelerationism, as a dark and pessimistic alternative to transhumanism, where , according to Land[12] and his followers, further accelerated cyber-technological development, primarily focused on AI and “machine learning”, could lead to the so-called “techno-capitalist singularity” that, like an imploding black hole, will destroy humanity as we know it, and lead to an explosion of artificial intelligence, reducing humans to dehumanized subjects trapped in front of screens and passivated by virtual reality, consumerism and synthetic drugs, with a high probability of ultimate destruction (” techno-capitalist apocalypse”) of civilization as we know it, due to the growing global pollution, some new viral pandemic or the impact of climate change.

Hopefully, we believe that we have not yet reached that irreversible point of singularity, and that the measures taken by world governments in the field of “green” transition and the overall transformation of the socio-economic system into a resilient and sustainable whole will still yield positive results, but all this is possible only with the use of all available resources and achievements, not only in the field of technological, but also of comprehensive socio-philosophical progress.

[1] Francis Yoshihiro Fukuyama (1952 – ), American political scientist, political economist, international relations scholar, and writer.

[2] Gilles Deleuze (1925-1995), French philosopher, one of the most influential philosophers in the second half of the 20th century.

[3] Pierre-Félix Guattari (1930-1992), French psychoanalyst, philosopher, and political activist.

[4] Jean Baudrillard (1929-2007), French postmodern sociologist, philosopher and poet, best known for his analyses of media, contemporary culture, and technological communication.

[5] Jean-Paul Sartre, (1905-1980), French philosopher, writer and playwright, creator of atheistic existentialism.

[6] Friedrich Nietzsche, (1844-1900), German philosopher, one of the greatest modern thinkers and one of the harshest critics of Western civilization, culture and Christianity; philologist, essayist, philosopher, poet and composer.

[7] Lewis Mumford (1895/1990), American historian, sociologist and philosopher of technology

[8] Martin Heidegger (1889 – 1976), German philosopher, best known for his contributions to the fields of phenomenology, hermeneutics and existentialism.

[9] Michel Foucault, (1926-1984), French philosopher, sociologist, writer and historian.

[10] Max Weber (1864 – 1920), German economist, historian, sociologist and politician.

[11] Sigmund Freud (1856 – 1939), Austrian physician and psychiatrist, one of the analysts of the psychoanalytic school. He is considered one of the most influential, but also the most controversial scientists of the 20th century.

[12] Nick Land (1962 – ), British philosopher, known as “the Godfather of accelerationism”, one of the most influential thinkers of contemporary art and cyberpunk

Comments (1)
stinky / June 27, 2024

Mladenović actually has very interesting ideas in this article and he correctly and imaginatively applies philosophical ideas to the field of energy. it’s a pity he doesn’t do it without name dropping philosophers and explaining their core ideas – both are completely unnecessary. he’d be less pretentious and verbose

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