An agent-based model for energy service companies

The residential housing sector is a major consumer of energy accounting for approximately one third of carbon emissions in the United Kingdom. Achieving a sustainable, low-carbon infrastructure necessitates a reduced and more efficient use of domestic energy supplies. Energy service companies offer an alternative to traditional providers, which supply a single utility product to satisfy the unconstrained demand of end users, and have been identified as a potentially important actor in sustainable future economies. An agent-based model is developed to examine the potential of energy service companies to contribute to the large scale upgrading of household energy efficiency, which would ultimately lead to a more sustainable and secure energy infrastructure. The migration of households towards energy service companies is described by an attractiveness array, through which potential customers can evaluate the future benefits, in terms of household energy costs, of changing provider. It is shown that self-financing is a limiting factor to the widespread upgrading of residential energy efficiency. Greater reductions in household energy costs could be achieved by committing to longer term contracts, allowing upgrade costs to be distributed over greater time intervals. A steadily increasing cost of future energy usage lends an element of stability to the market, with energy service companies displaying the ability to retain customers on contract expiration. The model highlights how a greater focus on the provision of energy services, as opposed to consumable products, presents a viable approach to reducing future energy costs and usage.