Smart, circular and renewable: The role of cooperative governance in accelerating a sustainable energy transition

Abstract

The proliferation of renewable energy contributes to the Sustainable Development Goals but also leads to waste issues and critical raw material dependencies. It is therefore important to study circular economy (CE) strategies for renewables to mitigate these challenges, while ensuring broad social participation and enhancing community and business resilience. We apply market failure and cooperative theory to explore how cooperative governance can enable and embed circularity in smart grids. Using a case study of a smart grid project in Belgium, we identify key barriers and enablers for fostering circular outcomes. Our findings suggest that cooperative governance can mitigate market failures involved, such as split incentives and asymmetric information, resolving missing markets and facilitating the integration of CE strategies in smart grids. Analysing design-implementation gaps and boundary conditions for scaling and replication highlights the importance of overcoming regulatory barriers and engaging stakeholders through compelling value propositions. While cooperatives are a promising model for advancing sustainable energy transitions, they require regulatory support and community involvement to realise their full potential. Smart grid development may be shaped by regional institutional contexts but the insights on cooperatives derived from this study have a broad international relevance given the globally applied and comparable framework employed.