Market players in the energy sector transition are heterogeneous, have bounded rationality and are influenced by
their own past failures, as well as imitating the successes of their competitors. However this agent heterogeneity
and complex behaviour in investment choices is not taken into account in traditional energy-economy models
used to inform energy sector policies. By using BRAIN-Energy, an agent-based model of investment in electricity
generation, which enables to study the impact of actors’ heterogeneous characteristics on the transition pathways of the UK, German and Italian electricity sectors, this paper shows how historic path-dependency in investment choices displaces low-carbon in favour of high-carbon investments under a weak regulatory framework.
By contrast, imitation can help the diffusion of renewable technologies, through a self-reinforcing positive
feedback when government subsidies to low-carbon investments are in place
