Modelling Energy Transition in Germany: An Analysis through Ordinary Differential Equations and System Dynamics

Abstract

This paper proposes the application of a multivariate diffusion model, based on ordinary differential equations, to investigate the energy transition in Germany. Specifically, the model is able to analyze the dynamic interdependencies between coal, gas and renewables in the energy market. A system dynamics representation of the model is also performed, allowing a deeper understanding of the system and the set-up of suitable strategic interventions through a simulation exercise. Such simulation provides a useful indication of how renewable energy consumption may be stimulated as a result of well-specified policies.

Keywords

• energy transition
• multivariate diffusion model
• system dynamics
• simulation
• renewable energy
• decarbonization