On the Disruptive Innovation Strategy of Renewable Energy Technology Diffusion: An Agent-Based Model

Authored by Yongchao Zeng, Peiwu Dong, Yingying Shi, Yang Li

Date Published: 2018

DOI: 10.3390/en11113217

Sponsors: Chinese National Natural Science Foundation

Platforms: No platforms listed

Model Documentation: Other Narrative Flow charts Mathematical description

Model Code URLs: Model code not found

Abstract

Renewable energy technologies (RETs) are crucial for solving the world's energy dilemma. However, the diffusion rate of RETs is still dissatisfactory. One critical reason is that conventional energy technologies (CETs) are dominating energy markets. Emergent technologies that have inferior initial performance but eventually become new dominators of markets are frequently observed in various industries, which can be explained with the disruptive innovation theory (DIT). DIT suggests that instead of competing with incumbent technologies in the dominated dimension, redefining the competition on a two-dimensional basis is wise. Aiming at applying DIT to RET diffusion, this research builds an agent-based model (ABM) considering the order of entering the market, price, preference changing and RET improvement rate to simulate the competition dynamics between RETs and CETs. The findings include that the order of entering the market is crucial for a technology's success; disruptive innovation is an effective approach to cope with the disadvantage of RETs as latecomers; generally, lower price, higher consistency with consumers' preferences and higher improvement rate in the conventional dimension are beneficial to RET diffusion; counter-intuitively, increasing RET's improvement rate in the conventional dimension is beneficial to RET diffusion when the network is sparse; while it is harmful when the network is densified.

Tags

Simulation Agent-based modeling Market Adoption Demand Barriers Photovoltaic systems Renewable energy technology Disruptive innovation Energy market