Title: Optimal control model of technology transition

Authors: Donald A. Hanson, Yaroslav Kryukov, Sven Leyffer, Todd S. Munson

Addresses: Decision and Information Sciences, Argonne National Laboratory, 9700 South Cass Avenue, Argonne, Illinois 60439, USA. ' Tepper School of Business, Carnegie Mellon University, 5000 Forbes Ave., Pittsburgh, PA 15213, USA. ' Mathematics and Computer Science Division, Argonne National Laboratory, 9700 South Cass Avenue, Argonne, Illinois 60439, USA. ' Mathematics and Computer Science Division, Argonne National Laboratory, 9700 South Cass Avenue, Argonne, Illinois 60439, USA

Abstract: This paper discusses the use of optimisation software to solve an optimal control problem arising in the modelling of technology transition. We set up a series of increasingly complex models with such features as learning-by-doing, adjustment cost, and capital investment. The models are written in continuous time and then discretised by using different methods to transform them into large-scale non-linear programs. We use a modelling language and numerical optimisation methods to solve the optimisation problem. Our results are consistent with findings in the literature and highlight the impact the discretisation choice has on the solution and accuracy.

Keywords: technology transition; discretisation; optimal control; modelling; energy; optimisation software; learning-by-doing; adjustment cost; capital investment.

DOI: 10.1504/IJGEI.2010.036954

International Journal of Global Energy Issues, 2010 Vol.33 No.3/4, pp.154 - 175

Received: 22 Jun 2009
Accepted: 23 May 2010

Published online: 18 Nov 2010 *

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