InvestAgent: Investigation of investment behaviour in the renewable electricity sector using actor-focused agent-based modelling

Motivation

The success of the energy transition in the electricity sector and other sectors depends on considerable investments in renewable energies and accompanying flexibility options on the generation as well as the consumption side. However, the necessary investment decisions are driven less by the assumed technology costs of a hypothetical cost-optimised energy system and more by microeconomic revenue expectations and incentive structures as well as behavioural patterns of the actors involved. This can also result in decisions that deviate from the theoretical cost minimum and, due to incomplete information, uncertainty or irrationality in decision-making, sometimes wrong decisions are made.

Aims and approach

Therefore, the objective of the project is to investigate how investment decisions in the renewable power sector can be modeled as realistically as possible and whether the decisions made in the model can contribute to the achievement of current climate targets as well as long-term security of supply. The focus of the analyses is on investment decisions in renewable generation units and flexible capacities with a special focus on modeling uncertain future revenue and cost expectations.

The project is structured around the following four research questions:

1. which real economic decision-making calculations influence the investment decisions of different groups of actors in the electricity sector?
2. how will actor structures and constellations develop in the future?
3. how can complex microeconomic decision-making processes be modelled and mapped in a computationally efficient way?
4. can sufficient investment in renewable generation and flexible balancing capacities be expected to achieve the goals of the Climate Protection Act?

The project is supported by the involvement of practitioners from the fields of banking and financing, project planning and operation as well as energy supply via an advisory board. Industry associations and relevant individual companies integrated into the advisory board provide important impulses from practice and support in generating the empirical basis and the framework of assumptions.

ZIRIUS

ZIRIUS was responsible for the stakeholder analysis in the InvestAgent project. This analysis classified stakeholder types, identified different stakeholder constellations in the planning, financing, and operation of facilities, described actual investment calculations, and assessed possible future changes. Methodologically, a standardized questionnaire was first developed and distributed to a broad range of participants from the relevant economic sectors:

• Finance and banking
• Plant planning and project development, and
• Operations management and services

This established an empirical foundation and made it easier to understand real-world investment calculations in terms of decision-making criteria and parameters, as well as financing conditions. Through in-depth interviews and discussions with the advisory board, additional detailed information and as many perspectives as possible were gathered. In a future-oriented workshop with representatives of all relevant stakeholder types from the areas of planning, financing, and operation of generation and storage facilities, expectations regarding future changes were gathered and analyzed specifically for each stakeholder group.

Results

The results of the agent-based modeling are presented on the website of the project partner and consortium coordinator, DLR – Institute of Networked Energy Systems: https://www.dlr.de/en/ve/research-and-transfer/projects/project-investagent/investagent-project-results

The results of the stakeholder analysis are outlined below:

• Online surveys on the investment behavior of different types of stakeholders in the electricity sector
• Guided interviews and future workshops
• Conclusion

Online surveys on the investment behavior of different types of stakeholders in the electricity sector

In the summer of 2024, an online survey was conducted on the investment behavior of professional stakeholders in renewable energy and flexible balancing capacity. Drawing on existing categorizations and based on a previous survey, the questionnaire included a classification of stakeholder types into which respondents could identify themselves. The proposed categories were “project developers,” “municipal and regional energy utilities,” “supra-regional energy utilities,” “international energy utilities,” “energy service providers,” “individual companies,” “Industry, Commerce, Trade & Services” and “Citizen Energy Cooperatives” were proposed as categories. Private individuals were not included due to differing decision-making rationales. In contrast, the category “financiers” was also offered to gather the perspectives of banks and similar stakeholders, as the provision of debt capital for renewable energy projects is of considerable relevance to further expansion.

The questionnaire was created using the SoSci Survey tool and covered the following topics:

• Stakeholder characteristics
• Decision-making criteria for core business
• Risk and return on core business
• Financing and capitalization of core business
• Decision-making criteria for newer business areas
• Risk and return on newer business areas
• Financing and capital resources for newer business areas
• Decision-making process

The questionnaire was sent to relevant market stakeholders via various distribution lists: the Electricity Market Group, the Research Network, BDEW, VkU, BEE, BSW, BBEn, and dena. The response rate was n=103, with a total of n=43 fully completed questionnaires.

A wide range of stakeholder types participated in the survey, with municipal/regional energy utilities and project developers being particularly well represented.

Figure 1: Actor types

The core business technologies most frequently mentioned by participants were onshore wind and rooftop PV systems.

Figure 2: Core Business Technology

The key motivations for investment decisions that emerged were profit generation, the generation of long-term returns, contributing to socio-ecological transformation, and the expectations of customers and shareholders, although there were significant differences in the weighting of these factors depending on the type of actor. For citizen energy cooperatives, regional value creation and opportunities for citizen participation also play a major role. The motivations for industry and GHD are quite different: in addition to profit generation, this type of actor is primarily driven by optimizing self-consumption and reducing electricity procurement costs. Among the key financial metrics in the core business, net present value, return on total capital and return on equity, as well as the internal rate of return, were identified as central. The required payback period is approximately 10–20 years. Return requirements regarding return on total capital were relatively low (most frequently cited as below 5%), while return requirements for return on equity were concentrated in the range of 5–10%.

In addition to the investment decision factors outlined above, the survey also asked about the specific course of decision-making processes, such as how uncertainties are handled and the role played by internal and external forecasts. Electricity price forecasts are most frequently used or purchased. According to the survey, a large majority uses at least two scenarios—and often even more—for profitability calculations. 

Figure 3: Other Influencing Factors

Key findings of the quantitative online survey included the observation that, due to the low risks associated with regulatory instruments (EEG), the majority of stakeholders are content with relatively low returns, and that unclear regulatory and political frameworks represent the greatest sources of uncertainty in investment decisions.

Based on these interim results from the InvestAgent project, guided interviews and a future-oriented workshop with stakeholders were conducted during the second half of the project.

Guided interviews and future workshops

Interviews were conducted with a total of 15 stakeholders, who were asked about investment activities in various technologies (and their specific characteristics, if any).

Table 1: List of stakeholders interviewed regarding technologies

The key questions addressed in the interviews were the perceived uncertainties surrounding the investment decisions of the various market players, as well as how each group dealt with them.

Among the uncertainties affecting all groups of stakeholders are, above all, the future structure of the Renewable Energy Sources Act (EEG), permitting processes, land availability and lease prices, grid connections and grid expansion, local acceptance, and the availability of materials. In addition, actor-specific differences emerge: citizen energy cooperatives are more heavily confronted with issues of debt financing, municipal utilities with equity financing issues, while large or international utilities and project developers must deal in particular with wake effects (shadowing of wind turbines), logistical challenges, and auction design—especially in offshore wind. In the case of battery storage, the expected cannibalization effect and competition for grid connections are also described as significant sources of uncertainty.

Stakeholders are responding to these uncertainties with a range of strategies. These include obtaining or developing forecasts for electricity prices, electricity demand, and operating hours, as well as developing business models beyond the EEG. Power Purchase Agreements (PPAs) are particularly important and are used differently depending on the stakeholder and technology: In the case of offshore wind, new turbines are marketed entirely through PPAs, while batteries can combine multiple business models with the same facility through “value stacking.” For cooperatives and municipal or regional utilities, local marketing models such as tenant-generated electricity, future energy sharing, or regional electricity rates also play a role. In addition, stakeholders are actively seeking to influence the regulatory framework, for example, in the design of a capacity market or the financing of renewable energy.

Further differences emerge depending on the type of stakeholder. Project developers and large international utilities focus on securing land strategically and address technical or legal challenges in offshore wind projects through lawsuits, scientific studies, or collaborations with larger external partners. Cooperatives and municipal or regional utilities seek to address land scarcity through closer cooperation with local governments in order to avoid high lease payments. They also rely on collaborations with other market players to facilitate shared learning. These stakeholders are also highly committed to strengthening local acceptance of renewable energy projects.

A half-day workshop with stakeholders was held in Berlin in September 2025 to critically discuss the findings and assess future developments. The findings of the stakeholder analysis were largely confirmed. Particular attention was drawn to challenges arising from regulatory uncertainty or disruptions. The workshop also highlighted the increasing competition for grid connections and the associated challenges for the further expansion of renewable energy.

Conclusion

The objectives of ZIRIUS’s analyses in InvestAgent were (1) to classify stakeholders, (2) to determine key decision-making logics and influencing factors in investment decisions in the electricity sector, and (3) to identify stakeholder strategies and future development trends.

The results of the online survey show that stakeholders invest primarily in wind and solar capacity. Key motivations include profit generation—even in the long term—as well as contributing to the socio-ecological transition. Additional motivations include contributing to regional value creation and public services, although there are stakeholder-specific differences (primarily municipal utilities and citizen energy cooperatives cite these motives). Return requirements for renewable energy are low (around 5%) due to calculable risks, primarily stemming from the Renewable Energy Sources Act (EEG). The decision itself is made using established metrics such as net present value, return on equity or return on debt, and internal rate of return. Forecasts—especially for electricity prices—are either purchased or prepared in-house by nearly all stakeholders to estimate revenues, and the decision is often based on multiple scenarios.

The interviews conducted generally confirmed the survey results and provided further insights into specific challenges, depending on the stakeholder and technology. Overall, there is evidence of increasing heterogeneity within individual stakeholder groups, as well as a partial convergence of strategies among stakeholders who were previously at odds with one another. For established technologies, the perceived uncertainties are largely independent of stakeholder type and relate primarily to land availability, regulation, and public acceptance. Community energy cooperatives additionally face uncertainties regarding the procurement of debt capital. Investments in larger and newer technologies, such as offshore wind and battery storage, are primarily driven by larger actors, who must therefore also deal with technology-specific uncertainties. At the same time, it becomes apparent that strategies are converging to some extent across stakeholder boundaries and that local roots or a global orientation shape the way uncertainties are managed.