Issue with finding steady state in an e DSGE_lsqnonlin function

Steady state
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For example, capital seems to be predetermined based on its law of motion. But that is not the case in your production function

y = exp(-gamma*Z) * (k_fossil + k_rest)^a1 * l^a2 * E^(1 - a1 - a2);  // Return on capital  //r = a1 * y / (k_fossil + k_rest);

Also, Timing of capital in two sector model may be relevant.