Abstract
This study explores the impact of financing rules on energy system financing dynamics and the implications for niche innovation and energy transitions. Using an instrumental case study underpinned by critical realism, it draws on primary data from financiers and innovators in South Africa to propose a set of financing meta-rules, identify tensions in varying institutional contexts, and suggest multi-dimensional system impacts. The study introduces the concept of financing dynamics to link institutional pillars to financing rules and mechanisms. It also offers a framework of five financing rule domains that present critical institutional contexts which system actors navigate. Findings highlight the exclusionary nature of financing rules, the steering influence of development and philanthropic financing, and the need for further conceptualising innovation in transitions context. Future research could explore and develop the institutional characteristics of financing rule domains, consider reciprocal niche influences, and clarify the underlying power dynamics of financing actors in energy transitions. Moreover, theorising finance as a social system distinct from production and consumption systems may yield new modalities of niche-regime interactions and empowerment for understanding financing phenomena.
•Defines and operationalises financing dynamics for finance research•Proposes five financing rule domains, presenting tensions for energy transitions•Links financing meta-rules to energy system impacts and niche implications•Proposes conceptualising finance distinct from production and consumption systems•Policy insights include social, governance, and conceptual interventions.