A McKean-Vlasov approach to distributed electricity generation development

This paper analyses the interaction between centralised carbon-emissive technologies and distributed non-emissive technologies. In our model, a representative consumer satisfies her electricity demand by investing in distributed generation (solar panels) and by buying power from a centralised firm. The firm provides non-random electricity generation subject to a carbon tax and to transmission costs. We also consider the point of view of a social planner. We formulate the investment decisions as McKean-Vlasov control problems with stochastic coefficients, providing explicit solutions to the control problems faced by each player. Joint work with René Aid and Huyên Pham.