Strategic Interplay in the Energy Transition: A Leader-Follower Approach to Multiscale Planning

This work explores the influence of national-level energy pricing policies on local investment strategies within Switzerland's energy system. A hierarchical optimization framework is employed, in which the national level acts as the leader by setting electricity import and export prices, while district-level agents act as followers, optimizing their local energy investments in response to these national signals. The model integrates both national-scale and district-level optimisations to simulate coordinated energy system design under multiple policy scenarios. Three core case studies are investigated, all defined at the national level: (i) a no-import and noexport scenario, (ii) sensitivity analyses with several static electricity import tariffs, and (iii) a dynamic pricing scheme with monthly-varying import prices. Results demonstrate that high import tariffs or import restrictions drive substantial investment in district renewable energy systems, especially solar (PV) and wind power, to increase self-sufficiency. A clear investment tipping point emerges around import electricity tariff of 6 ct/kWh, where the system transitions from reliance on imports to prioritizing local generation. Dynamic tariffs result in system outcomes similar to those under static tariffs set at the annual average of the dynamic prices, highlighting the significance of long-term price signals. The findings underline the critical role of coherent multi-level coordination in shaping decentralized energy transitions.