IRPsim: A techno-socio-economic energy system model vision for business strategy assessment at municipal level

Decision makers of municipal energy utilities responsible for future portfolio strategies are confronted with making informed decisions within the scope of continuously evolving systems. To cope with the increasing flexibility of customers, and their autonomous decision-making processes, determining newly established municipal energy-related infrastructure has become a challenge for utilities, which are struggling to develop suitable business models. Even though business portfolio decisions are already supported by energy system models, models only considering rational choices of economical drivers seem to be insufficient. Structural decisions of different market actors are often related to bounded rationality and thus are not fully rational. A combined analysis of sociological and technological dynamics might be necessary to evaluate new business models by providing insights into the interactions between the decision processes of market actors and the performance of the supply system. This research paper outlines a multi-model vision called IRPsim (Integrated Resource Planning and Simulation) including bounded and unbounded rationality modeling approaches. The techno-socio-economic model enables the determining of system impacts of behavior patterns of market actors on the business performance of the energy supply system. The mutual dependencies of the coupled models result in an interactive and dynamic energy model application for multi-year business portfolio assessment. The mixed-integer dynamic techno-economic optimization model IRPopt (Integrated Resource Planning and Optimization) represents an adequate starting point as a result of the novel actor-oriented multi-level framework. For the socioeconomic model IRPact (Integrated Resource Planning and Interaction), empirically grounded agent-based modeling turned out to be one of the most promising approaches as it allows for considering various influences on the adoption process on a micro level. Additionally, a large share of available applied research already deals with environmental and energy-related innovations.