Modeling technological change in energy systems – From optimization to agent-based modeling

Abstract

Abstract Operational optimization models are one of the main streams in modeling energy systems. Agent-based modeling and simulation seem to be another approach getting popular in this field. In either optimization or agent-based modeling practices, technological change in energy systems is a very important and inevitable factor that researchers need to deal with. By introducing three stylized models, namely, a traditional optimization model, an optimization model with endogenous technological change, and an agent-based model, all of which were developed based on the same deliberately simplified energy system, this paper compares how technological change is treated differently in different modeling practices for energy systems, the different philosophies underlying them, and the advantages/disadvantages of each modeling practice. Finally, this paper identifies the different contexts suitable for applying optimization models and agent-based models in decision support regarding energy systems.