Is economic optimism hampering long term energy efficiency goals? The role of energy system models

Panel: 1. Foundations of future energy policy

This is a peer-reviewed paper.

Authors:
Sofia Simoes, CENSE - Centre for Environmental and Sustainability Research
Energy and Climate Group
DCEA FCT-UNL, Portugal
Luis Dias, CENSE, Faculdade Ciências e Tecnologia, Universidade Nova de Lisboa, Portugal
Patricia Fortes, CENSE, Faculdade Ciências e Tecnologia, Universidade Nova de Lisboa, Portugal
João Pedro Gouveia, CENSE, Faculdade Ciências e Tecnologia, Universidade Nova de Lisboa, Portugal
Júlia Seixas, CENSE, Faculdade Ciências e Tecnologia, Universidade Nova de Lisboa, Portugal

Abstract

Energy system models as TIMES or PRIMES support policy makers in energy and climate change mitigation policies, as the EU-wide energy efficiency (EE) goal of 30% by 2030. Model outputs are determined by assumptions, some of which are tested. However, the economic development assumptions considered in the models are less experimented with. Economic growth is present in all long-term energy scenarios as it might not be politically acceptable to consider otherwise. Thus, energy system models show an energy future with growing energy services demand.

We explore to what extent such economic optimism affects the definition of long term EE goals. We use the linear optimization bottom-up TIMES_PT energy system model implemented for Portugal, which has been used for policy support for a decade. We model in TIMES_PT how four different macro-economic trajectories lead to different energy efficiency goal formulation and subsequent energy efficiency polices. The Low scenario follows the development pathway of the last years but with a GDP growth of 1.5% pa over the period 2020–2050, whereas the High scenario considers a GDP growth of 3.0% pa. We then deviate from traditional economic optimism with the Sufficiency and Revolution scenarios, respectively with a GDP evolution till 2050 constant from 2014 and a decrease by 7% every 5 years (as in 2007–2013).

With the traditional economic optimistic vision, the final end-use energy consumption (FEC) in 2050 is 4% lower (Low) or 17% higher (High) compared to 2010. In the Sufficiency and Revolution the FEC in 2050 is 19-50% lower. We find a substantial difference for energy efficiency target setting depending on the considered economic scenario. Energy system models inherently consider all possible energy efficiency improvement due to deployment of more efficient technologies. We argue that this is not enough when looking into long-term energy futures requiring an open mind frame. One way to do so is, together with policy makers, to explore futures where the demand for energy services is not necessarily growing. By doing so the importance of EE policies focused on the drivers affecting energy services demand can be made visible.