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By J. Andreas

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Now for a linear system, net outflow is directly proportional to the state of the stock: Net Inflow ¼ dL=dt ¼ ÀNet Outflow ¼ Àd à L where the constant, d, represents the fractional decay rate of the stock, L. The solution of this differential equation is: Lt ¼ L0 à eðÀdtÞ This solution indicates that the stock will decay at an exponential rate (as shown in Fig. 4). That is why we call a negative feedback loop, a goal-seeking feedback system. In the absence of any stated goal, stock will decay to zero (as in this case).

Franco, C. J. (2009). Games for electricity traders: Understanding risk in a deregulated industry. Energy Policy (pp. 465–471). , & Pena, E. (1995). System dynamics modeling for residential energy efficiency and management. Journal of the Operational Research Society, 46, 1163–1173. , Chen, S. , & Zhang, L. X. (2013). System dynamics modeling for urban energy consumption and CO2 emissions: A case study of Beijing-China. Ecological Modelling, 252, 44–52. 26 3 Meeting the Challenges: Energy Policy Modeling … Fiddaman, S.

4). That is why we call a negative feedback loop, a goal-seeking feedback system. In the absence of any stated goal, stock will decay to zero (as in this case). Now, consider the example of a “capital depreciation process”, where initial production capital is 100 MW and it depreciates at 5 % per year. The behavior of this capital depreciation process is shown in Fig. 4. 2 There are various stocks in an energy system that decision makers want to keep at a specific level. For instance, fuel inventory needs to be maintained at a specific level to avoid extra storage cost or production loss due to the shortage of fuel.

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