Barazza, Elsa;
(2019)
The low-carbon transition of the European electricity sector: an agent-based approach to understand actors' strategic investments in electricity generation assets.
Doctoral thesis (Ph.D), UCL (University College London).
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Abstract
The 2015 Paris Agreement seeks to limit global temperature increase to well below 2°C above pre-industrialised levels before the end of the century. To achieve this ambitious target the electricity sector needs to be decarbonised. This low-carbon transition requires substantial financial flows, and a re-allocation of capital towards low-carbon investments. However, clean-energy investments in Europe are declining, and a diversified investors landscape is becoming increasingly important to bridge the financing-gap, as strong financial pressures threaten incumbent utilities’ role as investors. In order to support private sector actors’ low-carbon investments, and prevent the lock-in of existing high carbon technologies, effective policies are needed, which acknowledge the heterogeneity and different micro-economic decisions of private sector actors. This research develops an agent-based model called BRAIN-Energy (Bounded Rationality Agents INvestments) which analyses the strategic investment decisions in power generation assets of different market players with bounded-rationality, and the effects of their myopic and path-dependent choices and their interactions on the long-run evolution of the electricity sector to 2050. BRAIN-Energy aims to address a gap in existing energy-modelling literature, where most studies assume homogeneous and perfectly rational agents, and lack attention to the actors’ heterogeneity and bounded-rationality. Case studies are the UK, the German and the Italian electricity markets. Results from BRAIN-Energy show how conducive conditions for an effective allocation of investments between low-carbon and conventional generation technologies are determined by the interplay of the government’s and the market players’ strategies. Moreover, BRAIN-Energy shows how an electricity sector with heterogeneous actors requires a stronger CO2 price to be decarbonised, which should be supported by frequent carbon budgets to be effective. Results also show how market players’ heterogeneity and bounded-rationality create barriers to climate change mitigation efforts, by affecting the scenarios environmental performance and political dimension, especially when government intervention is lower. Hence, assuming rational and homogeneous agents in energy system models could lead to ineffective policies for energy transitions.
| Type: | Thesis (Doctoral) |
|---|---|
| Qualification: | Ph.D |
| Title: | The low-carbon transition of the European electricity sector: an agent-based approach to understand actors' strategic investments in electricity generation assets |
| Event: | UCL |
| Open access status: | An open access version is available from UCL Discovery |
| Language: | English |
| Additional information: | Copyright © The Author 2019. Original content in this thesis is licensed under the terms of the Creative Commons Attribution 4.0 International (CC BY 4.0) Licence (https://creativecommons.org/licenses/by/4.0/). Any third-party copyright material present remains the property of its respective owner(s) and is licensed under its existing terms. Access may initially be restricted at the author’s request. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10066151 |
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