Investment Decision Model for new technologies



Topics of our clients

  • Market analysis of new technologies (e.g. renewables and energy storages)
  • Influence of market design on market development
  • Analysis of investor and end consumer behavior

Background of model application

This model was developed to evaluate the realization potential of political framework conditions concerning the energy system. The model calculates the explorative development of the German energy system. The main questions that are addressed by the model are: Which group of investors is willing to invest under given framework conditions in which technology? At which location will the technology be built and how will these developments affect the future system? The model also considers if the resulting system is realistic in terms of ensuring system stability. For example: can the system deal with a high wind penetration in the north of Germany or do grid constraints limit the necessary electricity flow? In conclusion, the model, E2S is able to show if the investment decision of various stakeholders is system compatible or if there is a necessity to change the current framework conditions to avoid a certain development.

© Fraunhofer ISE

Model design of E2S – Investment Decision Model.

Characteristics of the model

The following characteristics describe the model E2S:

  • Target: Conception and evaluation of explorative development paths of the German energy system on the basis of investment decisions until the year 2050
  • Type of energy system model: bottom-up investment decision simulation coupled with an hourly unit commitment and grid flow simulation
  • Sectors: Electricity and heat
  • Stakeholders: private sector, utilities, banks and funding mechanisms, businesses, project developers, and farmers
  • Spatial level: 402 Regions (NUTS-3-level)
  • Temporal disaggregation: annual until 2050, 8760 hours per year
  • Programming language: R, modular design

Potential users

  • Industry
  • Energy service providers
  • Political decision makers
  • Single stakeholders


  • Erneuerbare Energien Szenarien Modellierungs-Tool: Eigenforschungsprojekt Fraunhofer ISE, 2011 – 2014
  • Senkpiel, Charlotte; Hartmann, Niklas; Taumann, Michael; Schlegl, Thomas: Der Weg zu einer erneuerbaren Stromversorgung in Deutschland – ein investorenbasierter Ansatz. In: Energiewirtschaftliche Tagesfragen, 64. Jg. (2014) Heft 5, S. 49-52.
  • Senkpiel, Charlotte; Hartmann, Niklas; Taumann, Michael; Schlegl, Thomas: Long-term development of the German electricity generation system including storage – a bottom up investment decision approach with a high spatial resolution, IRES Conference 2013, Berlin, International Renewable Energy Storage conference, November 2013, presentation
  • Taumann, Michael; Senkpiel, Charlotte; Kost, Christoph; Schlegl, Thomas: Long-term development of regional distribution and ownership of renewable energy projects in German electricity sector, IARES Conference 2013, Düsseldorf, International association for energy economics, August 2013, presentation