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The key role of historic path-dependency and competitor imitation on the electricity sector low-carbon transition

Barazza, E; Strachan, N; (2021) The key role of historic path-dependency and competitor imitation on the electricity sector low-carbon transition. Energy Strategy Reviews , 33 , Article 100588. 10.1016/j.esr.2020.100588. Green open access

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Abstract

Market players in the energy sector transition are heterogeneous, have bounded rationality and are influenced by their own past failures, as well as imitating the successes of their competitors. However this agent heterogeneity and complex behaviour in investment choices is not taken into account in traditional energy-economy models used to inform energy sector policies. By using BRAIN-Energy, an agent-based model of investment in electricity generation, which enables to study the impact of actors’ heterogeneous characteristics on the transition pathways of the UK, German and Italian electricity sectors, this paper shows how historic path-dependency in investment choices displaces low-carbon in favour of high-carbon investments under a weak regulatory framework. By contrast, imitation can help the diffusion of renewable technologies, through a self-reinforcing positive feedback when government subsidies to low-carbon investments are in place.

Type: Article
Title: The key role of historic path-dependency and competitor imitation on the electricity sector low-carbon transition
Open access status: An open access version is available from UCL Discovery
DOI: 10.1016/j.esr.2020.100588
Publisher version: https://doi.org/10.1016/j.esr.2020.100588
Language: English
Additional information: This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Keywords: Agent-based modelling of energy sector, Historic path-dependency, Bounded-rationality, Imitation, Investment decisions
UCL classification: UCL
UCL > Provost and Vice Provost Offices
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/10116963
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