Abstract
Energy transitions are complex and involve interrelated changes in the socio-technical dimensions of society. One major barrier to renewable energy transitions is lock-in from the incumbent socio-technical regime. This study evaluates Energy Product–Service Systems (EPSS) as a renewable energy market mechanism. EPSS offer electricity service performance instead of energy products and appliances for household consumers. Through consumers buying the service, the provider company is enabled to choose, manage and control electrical appliances for best-matched service delivery. Given the heterogenous market players and future uncertainties, this study aims to identify the necessary conditions to achieve a sustainable renewable energy market. Simulation-Based Design for EPSS framework is implemented to assess various hypothetical market conditions’ impact on market efficiency in the short term and long term. The results reveal the specific market characteristics that have a higher chance of causing unexpected results. Ultimately, this paper demonstrates the advantage of implementing Simulation-Based Design for EPSS to design retail electricity markets for renewable energy under competing market mechanisms with heterogenous economic agents.
Highlights
It has been acknowledged that energy transitions are challenged with lock-in from the incumbent socio-technical regime
Instead of attempting to develop a specific market design, this study aims to identify the required preconditions for Energy Product–Service Systems (EPSS) to achieve a sustainable renewable energy market design
This study suggests Energy Product–Service Systems (EPSS) for sustainable renewable energy markets
Summary
It has been acknowledged that energy transitions are challenged with lock-in from the incumbent socio-technical regime. Transitioning energy systems require social commitment, involving producers, users, financial support and political will from various actors. Investment and innovation to enable it, the transition cannot be realized. Policies have been introduced to stimulate renewable energy technology installation and escape system lock-in—for example, feed-in-tariffs and other subsidies or support systems [1]. The effectiveness of such policies varies among regions, depending on actors’ behavior and decision-making processes. Policymakers are expected to consider the human dimensions of energy systems alongside the technological and organizational dimensions
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