Combining Behavioral Approaches with Techno-Economic Energy Models: Dealing with the Coupling Non-Linearity Issue

Francesco Moresino,Emmanuel Fragnière

doi:10.3390/en11071787

Abstract

Consumer behaviour is often complex and even sometimes not economically rational. Wrongly, the first techno-economic energy planning models assumed the economic rationality hypothesis and, therefore, represented consumers’ behaviour incorrectly. Nevertheless, the current trend is to couple these models with behavioural approaches that were specially developed to describe the real consumer choices. A novel approach was recently proposed, where a classical energy model is coupled with a share of choice model. This new approach has however two weaknesses. First, the share of choice increases the computational complexity as it necessitates additional binary variables for the modelling. Second, for complex models, the inclusion of the share of choice can lead to non-linearity and hence to severe computational problems. In the present paper, we propose to improve this method by externalizing the share of choice. Doing so, the number of binary variable will be reduced and the linearity property will be kept even for complex models.

Highlights

In the 1970s, the first oil shock followed by a second forced governments and agencies to reconsider their energy policies as they were too dependent on oil
Decisions makers required the help of energy models in order to evaluate the economic impact of the policies they envisaged to implement [1]
Our new approach enables us to bypass both drawbacks. It reduces the number of binary variables and, the computational complexity

Summary

Introduction

In the 1970s, the first oil shock followed by a second forced governments and agencies to reconsider their energy policies as they were too dependent on oil. Joint Program on the Science and Policy of Global Change; WEM (World Energy Model) [26] developed at the International Energy Agency; or GCAM (Global Change Assessment Model) [27,28] developed at the University of Maryland In this trend to combine techniques from different domains, it is worth noting the increasing use of behavioural economics approaches to understand consumers’ real choices regarding energy consumption (see for instance [29,30,31,32,33] for recent applications). Following this idea, [52] combined a classical energy model with the share of choice model This approach, which combines a behavioural method with operational research, has two drawbacks.

The Case Study

Externalizing the Share of Choice

The Model

Conclusions

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