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Title: The low-carbon transition of the European electricity sector : an agent-based approach to understand actors' strategic investments in electricity generation assets
Author: Barazza, Elsa
ISNI:       0000 0004 7660 4257
Awarding Body: UCL (University College London)
Current Institution: University College London (University of London)
Date of Award: 2019
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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.
Supervisor: Strachan, N. ; Grubb, M. Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available