Transition patterns of distributed energy generation concepts considering network effects

Abstract

Distributed generation is becoming increasingly important in energy systems, causing a transition of regional energy systems. These decentralisation dynamics are difficult to predict in their scope and timing and therefore become a major challenge for political decision makers, utility companies and technology developers. Network effects are crucial in these decentralisation dynamics, strongly influencing the dominance of the various concepts of distributed energy generation. Network effects emerge between technologies, the installed base of a concept and actor-specific decision criteria. A System Dynamics simulation model is built, capturing the consumer concepts related to distributed generation as well as arising network effects, to analyse likely transition dynamics in regional energy systems. The direct network effects of grid charge adjustment, learning theory and an effect due to density as well as indirect network effect between storage technologies and combined heat and power systems in microgrids are represented in the model. Preliminary simulation results on the transition of the distributed generation concepts are shown and will be analysed in further research on the specific impact of network effects on the transition patterns. This paper aims to make a contribution to the field of energy transitions by translating theories on network effects of the economic literature to the energy systems simulation and by discussing and simulating relevant network effects as relevant drivers of the dissemination of distributed energy generation concepts and the related consumer concepts.