Energy supply and demand
Composition of Energy supply and demand
|Component is implemented in:|
Key policy issues
- How can energy supply and demand become more sustainable, balancing human development, security of supply, and concerns about climate change and air pollution?
- What transitions in the energy system would meet long-term climate goals?
- How are these strategies affected by uncertainties in the energy system?
Description of Energy supply and demand
Energy consumption and production constitutes a central component in discussions on sustainable development. Without the use of energy most human activities are impossible. Hence, securing a reliable and affordable supply of fit-for-purpose energy is an important element of countries' economic and energy policies. Three-quarters of the world's energy supply is fossil fuel. However, over time, depletion of fossil fuel resources is expected to lead to rising prices at least for oil, and easily accessible resources will be concentrated in a decreasing number of countries. Energy consumption and production is also important for environmental reasons –fuel combustion is the single most important source of local and regional air pollution and greenhouse gas emissions.
The future of the global energy system is highly uncertain and depends on factors such as technological innovations and breakthroughs, socio-economic developments, resource availability and societal choices. Exploring different scenarios for developments around the use and supply of energy provides information for decision-makers to base strategic policy decisions.
The energy supply and demand model (TIMER)
The IMage Energy Regional model, also referred to as TIMER, has been developed to explore scenarios for the energy system in the broader context of the IMAGE global environmental assessment framework (De Vries et al., 2001; Van Vuuren, 2007). TIMER describes 12 primary energy carriers in 26 world regions and is used to analyse long-term trends in energy demand and supply in the context of the sustainable development challenges. The model simulates long-term trends in energy use, issues related to depletion, energy-related greenhouse gas and other air polluting emissions, together with land-use demand for energy crops. The focus is on dynamic relationships in the energy system, such as inertia and learning-by-doing in capital stocks, depletion of the resource base and trade between regions.
Similar to other IMAGE components, TIMER is a simulation model. The results obtained depend on a single set of deterministic algorithms, according to which the system state in any future year is derived entirely from previous system states. In this respect, TIMER differs from most macroeconomic models, which let the system evolve on the basis of minimising cost or maximising utility under boundary conditions. As such, TIMER can be compared to energy simulation models, such as POLES (Criqui et al., 2003) and GCAM (Thomson et al., 2011).
- The words energy demand and energy use are often used interchangeably. However, in the past data were about statistical energy use. For the future, trends were extrapolated and denoted as energy demand, which in the model is assumed to be fully supplied and thus equal to use.
Overview of TIMER
The energy model has three components: energy demand; energy conversion; and energy supply (see Figure Flowchart). The energy demand component describes how energy demand is determined for five economic sectors -industry, transport, residential, services and other sectors. The energy conversion components describes how carriers such as electricity and hydrogen are produced. Finally, the energy supply modules describe the production of primary energy carriers, and calculate prices endogenously for both primary and secondary energy carriers that drive investment in the technologies associated with these carriers. The energy flows in all three main components allow calculation of greenhouse gas and air pollutant emissions.
The energy model TIMER focuses on long-term trends in energy supply and demand. It was mainly developed for analysing climate mitigation strategies and has also been used to explore other sustainability issues. These characteristics impose some limitations on the model. Firstly, the model cannot be used to examine macroeconomic consequences of mitigation strategies, such as GDP losses, because other aspects of the economy are not included. Secondly, the strategies depicted by the model are not necessarily optimal from an inter-temporal perspective because as a simulation model, there is no information on future development in a scenario (myopic). Instead, decisions are made on the basis of available model information at that time in the scenario. Finally, although the model has been used to analyse sustainability issues other than climate change, still much less options have been included to explore such policies (see Air pollution and energy policies).
Input Energy supply and demand component
|IMAGE model drivers and variables||Description||Source|
|Energy resources||Volume of energy resource per carrier, region and supply cost class (determines depletion dynamics).||Drivers|
|GDP per capita||Gross Domestic Product per capita, measured as the market value of all goods and services produced in a region in a year, and is used in the IMAGE framework as a generic indicator of economic activity.||Drivers|
|Lifestyle parameters||Lifestyle parameters influence the relationship between economic activities and demand for energy.||Drivers|
|Population||Number of people per region.||Drivers|
|Private consumption||Private consumption reflects expenditure on private household consumption. It is used in IMAGE as a driver of energy.||Drivers|
|Sector value added||Value Added for economic sectors: Industry (IVA), Services (SVA) and Agriculture (AVA). These variables are used in IMAGE to indicate economic activity.||Drivers|
|Technology development of energy conversion||Learning curves and exogenous learning that determine technology development.||Drivers|
|Technology development of energy supply||Learning curves and exogenous learning that determine technology development.||Drivers|
|Carbon price||Carbon price on the international trading market (in USD in 2005 per tonne C-eq) calculated from aggregated regional permit demand and supply curves derived from marginal abatement costs.||Climate policy|
|Land supply for bioenergy - grid||Land available for sustainable bioenergy production (abandoned agricultural land and non-forested land).||Land cover and land use|
|Conversion assumptions||Conversion assumptions.|
Output Energy supply and demand component
|IMAGE model variables||Description||Use|
|Bioenergy production||Total bioenergy production.|
|Energy demand and production||Aggregated energy demand and production indicators from the energy model.||Final output|
Composition of Energy supply and demand