MENGTECHProject reference: 20121
Funded under: FP6-SUSTDEV
Modelling of Energy Technologies Prospective in a General and Partial Equilibrium Framework
Total cost:EUR 1 675 688
EU contribution:EUR 1 243 492
Call for proposal:FP6-2004-ENERGY-3
Funding scheme:STREP - Specific Targeted Research Project
The objective of this proposal is to develop the modelling framework for a better assessment of energy policies given the EU ambitious targets regarding sustainable development. The transition will require from the economy a major shift of capital resources towards the development of new energy supply and network infrastructure, characterized by long gestation periods and low rates of return on investment. Models, in their state of the art, are not sufficiently developed regarding the adoption and the implications of future energy technologies and thus require further development. The models considered are POLES (World energy system model), PRIMES (European energy system model), NEMESIS (macro-econometric EU model) and GEM-E3 (World and EU general equilibrium model). For the macroeconomic models, the extensions of the models are twofold. Heterogeneous agents that differ in their decision making in terms of cost structure and perception of risk will be represented.
The investment decisions in energy infrastructure, characterized by increasing returns to scale and natural monopoly control will be made explicit. For the energy models, a complex energy and technology strategy exploration model will be developed for use as a front-end of the detailed models (mainly POLES and PRIMES). The new methodology will incorporate variety of suppliers and consumers, network effects as a source of technology diffusion dynamics, increasing returns to scale for new energy infrastructure and investment decision-making under uncertainty. Moreover, the modelling framework for depletable resources and climate change impact will be improved and the database on energy technologies updated. EU policies will be assessed with these new instruments and the development of a modelling expertise and dissemination of the tools in the enlarged EU is planned. The development within this project will give a set of completely updated models specifically appropriate to contribute to policy evaluation.