BRAIN-Energy (Bounded Rationality Agents INvestments model) is an agent-based model of electricity generation and investment. It is calibrated to the UK, German and Italian electricity sectors, of which it offers a stylised representation in terms of generation technologies, their installed capacity, actors, policies in the energy sector and climate change targets.
In BRAIN-Energy agents are heterogeneous and have heterogenous strategies. The aim of BRAIN-Energy is to study the aggregate effects of the investment decisions of the heterogeneous agents on the long-run evolution of the electricity sector to 2050, and to capture the emergent techno-economic trends in low-carbon investments arising from the heterogeneous micro-economic investment strategies of the agents. The main agents in BRAIN-Energy are incumbent electricity generators, new-entrants, the government and the regulator. On top of being heterogeneous, agents in BRAIN-Energy have bounded rationality, and exhibit path-dependency and imitation in their investment choices. Moreover, the investment choices of the agents co-evolve with the surrounding policy environment and governance structure.
Each year, agents take operational decisions about electricity production from their existing stock of assets, and subsequently decide about decommissioning unprofitable power plants, reassess the profitability of prior investments and take decisions about building new power stations. Investment decisions are taken by each agent independently, but at the same time each of them is confronted with the outcomes of the investment decisions of the other agents. Based on their own myopic expectations about future parameters, agents investment choices are based on economic criteria (NPV and return on investment calculations), and are also influenced by non-economic criteria such as path-dependency (learning from previous individual experience and investments) and imitation of successful strategies of other agents.
BRAIN-Energy is implemented in Netlogo (Wilensky and Northwestern University, 1999), and its time horizon is from 2012 to 2050. It proceeds in annual time steps, because the agents’ investment decisions and interactions are better captured on an annual basis. BRAIN-Energy’s main outcomes are aggregated and yearly capital investments (by technology and by agent), electricity price and electricity production, installed capacity, CO2 emissions from the power sector and evolution of agents’ market shares.
|Purpose:||Analysing the strategic investment decisions in power generation assets of different actors 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|
|Spatial scale:||UK, Germany and Italy|
|Temporal scale:||2012 to 2050 in yearly time steps|