To attain a better understanding of the energy transition we have applied Agent Based Modelling (ABM) to Integrated Assessment Modelling (IAM) in an abstract model with which we developed a proof of concept model of society’s response to a changing climate and energy system. Although there is no doubt that large scale neoclassical IAMs have provided key insights for business decisions and policy makers, we argue that there is a need for an approach that focuses on the role of heterogeneous agents. With our abstract ABM based on agents with heterogeneously spread discount rates we were able to give a new perspective on appropriate discount rates in the discussion between mitigation and adaption to climate change. We concluded that applying ABM to IAM yields good prospects to the further development of the implementation of society’s response to a changing environment and we propose future additions of the model to include adaptive behaviour.@en

Joey Nijnens holds a Master's degree in industrial ecology from Delft Technical University and Leiden University, as well as a Master's degree in supply chain management from Groningen University. He is employed at Monitor Deloitte as a strategy consultant, the strategy practice of Deloitte Consulting in the Netherlands, where he focuses on energy transition strategy and circular economy. Over the past years, his academic pursuits have centered around critical raw material supply, clean energy production dynamics, and clean energy supply chains. In his current role, he actively contributes to shaping national energy transition strategies and advancing clean energy investments. Paul Behrens (UK) is an author and associate professor at Leiden University. His research and writing on climate, energy, and food has appeared in outlets such as the BBC, Thomson Reuters, Politico, Nature Sustainability, Nature Energy, PNAS, Nature Food, and Nature Communications. His popular science book, “The Best of Times, The Worst of Times: Futures from the Frontiers of Climate Science” (Indigo Press, 2021) describes humanity's current trajectory and possible futures in paired chapters of pessimism and hope. Paul won International Champion in the Frontiers Planet Prize and the Falling Walls Prize in 2023. Oscar Kraan is a senior manager at Monitor Deloitte, the strategy practice of Deloitte Consulting in the Netherlands. He has more than 10 years of experience supporting governments and companies in the energy sector navigate the future of energy. Since 2018, Oscar has been part of Deloitte, where he focuses on developing decarbonization strategies and supporting the development of the hydrogen market. He co-leads Deloitte's Global Hydrogen Center of Excellence and the Future of Energy practice within Deloitte. In his work at Deloitte, he continues to be involved in scientific research around energy system integration, wherein he combines scientific insights with policy and business challenges. Before Deloitte, Oscar obtained his PhD on the topic of energy transition scenarios, wherein he applied agent-based modeling to energy and electricity system modeling. Before and during his PhD, Oscar worked 6 years with Shell's Scenario Team and Shell's New Energies Strategy Team. Benjamin Sprecher is an assistant professor of circular product design at the Delft Technical University. His main research interests are sustainable design, quantification of environmental impacts, and industrial ecology. His current work explores how quantification of environmental impacts can inform sustainable and circular design and how decisions at the product design level relate to system-level concepts such as circular economy. His PhD and postdoc were focused on critical raw materials and supply chain resilience, and he remains working on these topics, as well. René Kleijn is a professor of resilient resource supply at Leiden University in the Netherlands. He serves as the department head of the industrial ecology group at Leiden University and the scientific lead of the Circular Industries Hub at the Leiden-Delft-Erasmus Centre for Sustainability. His research primarily centers on sustainability matters, employing quantitative methods like life cycle assessment and substance and material flow analysis. Kleijn's expertise extends across various industries, including chemicals, energy, and recycling, where he effectively applies these methodologies to address environmental challenges. He has actively participated in numerous large consortia as part of EU-funded research projects. In recent years, his research has focused on critical raw materials, resilient supply chains, circularity, and material constraints within the evolving landscape of the energy transition.@en

Transparent, consistent accounting of climate-related energy targets is a fundamental building block to the architecture of international climate agreements. Many of these climate targets focus on the transition of the energy system which has led to the development of various energy transition scenarios. Now that fossil resources are being replaced by non-combustible and renewable energy sources a re-assessment of the applicability of the current set of metrics on which these energy scenarios are based is necessary. Now that energy derived from renewable and non-combustible resources with abundant availability but limited instantaneous availability becomes more prominent the ongoing electrification of the energy system combined with the decarbonisation of the electricity system has caused the current set of energy scenario metrics to become ambiguous. More specifically we show that Total Primary Energy (TPE) and its related indicators, Energy Efficiency (EE), Energy Intensity (EI) as well as the key metric Electricity Generation Capacity (EGC) have become unrepresentative, potentially misleading and for a large part irrelevant. This is problematic as these metrics steer climate policy and investment decisions based on statistical artefacts rather than valid representation of the energy system. This study concludes with a set of requirements on energy scenarios to overcome these problems that will lead energy scenarios to focus on Total Final Consumption within a mix of related energy metrics.@en

Full decarbonisation of the electricity system is one of the key elements to limit global warming. As this transition takes place, the electricity system must maintain system adequacy and remain affordable to consumers. In liberalised electricity markets investors are seen as key actors driving this transition. Due to the intermittent character of renewable assets, such as wind or solar parks, electricity systems with large shares of renewable electricity will need to become increasingly flexible. Evaluating whether specific market designs provide the right incentives to invest in flexibility, requires the simulation of realistic investor behaviour. Agent-based modelling provides the means to explore heterogeneous, imperfectly informed and boundedly rational investor behaviour within different electricity market designs. We evaluated two market designs; “energy-only” markets and markets with a Capacity Remuneration Mechanism (CRM). We conclude that energy-only markets, even with strong carbon pricing, do not incentivise investors to deliver a fully renewable, reliable and affordable energy system. Therefore policy makers should focus on developing CRMs which can work in combination with market incentives to reach a fully renewable, reliable and affordable electricity system in the second half of this century.@en