Agent-Based Modelling of EU Energy and Climate Policy: Investment, Uncertainty and Policy Imperfections

We simulate climate and energy policy for the EU using a flexible and modular agent-based modelling approach, we named Energy Modelling Laboratory (EMLab). The agent-based model focuses on investment in power generation and studies long run effects of various interacting European energy policies, and incorporates differences between countries. On the basis of investment theory, and with the inclusion of key uncertainties, this allows us to step away from lowest cost investment paths and study more realistic investment conditions. We see this as an important complementary approach to studying scenarios for the energy transition in Europe by simulating the effects of EU’s energy policy reality. We have developed modules with rich analyses of carbon and renewables policies, capacity mechanisms, investment behaviour and representation of intermittent renewables. On the basis of recent work, we present an overview of modelling results, and we show their relevance in the EU context.