The ecosystem of renewable energy shift and its future dynamics

Abstract

Substituting non-renewable energy for renewable energy plays an important role for our sustainability, which is the common goal for human beings. However, several strategies by governments and companies exist to make this shift, because the priority of each strategy mainly depends on the relative costs and their regulations, which makes this shift complicated. This paper describes a model of the common causal loop diagram and applies it to three cases. Additionally, by building stock and flow model, the future dynamics are simulated by System Dynamics. Based on the casual loop diagram analysis, the renewable shift makes three phases. The first phase is making an ecosystem of renewables initiated by political support or guideline such establishing a low generation cost and making the power grid system flexible enough to accept renewables. The second phase is pushing the energy mix by private investment to capture the economic benefit including reducing electric bills with low-cost renewable energy, the merit of reputation and sustainability of business. The third phase aims at meeting the political target of the energy mix by political strategies, such as tax exemptions, subsidies and obligations for companies. Stock and flow model of System Dynamics is applied for the future of the Japanese renewable shift cases to illustrate which compositions of the casual loop are the key causes for dynamics. At first, the relative cost triggers the renewable shift not only for companies but also for utilities. After that, the difference of the energy mix of a company and its target decides how much the energy mix increases each year. These two factors decide the intensiveness of investment of a company, even though the relative cost is not an internal factor. Also, the capacity mix of a utility deals with the speed of the renewable shift.