Tools and approaches for developing projection
estimates relevant to LRTAP Convention and
NEC reporting
The PRIMES model
By Dr. L. Mantzos
Energy-Economy-Environment Modeling Laboratory
ICCS/NTUA
October 2006, Thessaloniki
E3M – Lab
PRIMES energy system model
1.
2.
3.
4.
5.
6.
7.
Energy system model: mixed bottom-up (engineering) and
top-down (microeconomic behaviors)
Modular, with separate modules for demand and supply by
sector
Market-oriented: market equilibrium prices drive energy
balancing of demand and supply per fuel and market
Detailed (for 30 countries) and comprehensive (whole of
energy system, EU-wide networks)
Environment-oriented (climate change, links with RAINS for
air pollution, links with special models for transport)
Policy-oriented for a large variety of instruments (subsidies,
taxes, certificates, permit markets, R&D, …)
Very detailed electricity sector sub-model
30 October 2006
E3M – Lab
2
PRIMES: Price-driven and agentbased simulation of markets
►
Fundamental distinction of PRIMES from other modelling
methodologies:
 The behaviour of agents (e.g. households, steel industry, trade sector,
power generation, etc.) is simulated individually according to
microeconomic theory, including behavioural patterns, such as habits,
comfort, risk management etc.
 As a result of individual behaviours, demand and supply of energies is
formulated, both for short term and long term including investment
 Simultaneous energy markets are cleared to determine prices that balance
demand and supply; prices are mostly driven according to Ramsey-Boiteux
methodology (adaptable to both regulated monopoly and competitive
markets) plus a mark-up reflecting market power
 Market equilibrium is static within a period but evolution is dynamic in a
time forward manner as investment is endogenously driven by supply
demand imbalances and technology profitability expectations.
►
Policies and measures, the world energy markets, technology and the
economy drive behaviour and market equilibrium.
30 October 2006
E3M – Lab
3
PRIMES model features
►
►
Explicit technologies in demand and supply
Technology dynamics




►
vintages
penetration of new technologies
inertia from past structures and
pace of capital turnover
Time-of-use varying load of network-supplied energy
carriers to synchronise electricity, steam, renewables,
pipeline gas
 in both demand and supply
►
Non-linear relations:
 Economies of scale and Learning by doing for
technologies
 Consumer choices and saturation effects
 Supply cost-curves for potential of resources, new
technologies and the use of new sites for energy plants
30 October 2006
E3M – Lab
4
Recent work on PRIMES model
1.
2.
New improved electricity and steam sub-model
DC linear optimal power flow
 Single bus per country (34 nodes)
 All present and future interconnectors
 Endogenous flows and trade of electricity
Existing and under construction power plants
inventory – dispatching calibrated for 2005
4. Extended list of new power technologies (145)
with and without cogeneration or CO2 capture
5. Economics of investment and pricing related to
liberalized market conditions
6. Environmental policies including ETS
represented
3.
30 October 2006
E3M – Lab
5
Energy-Economy-Environment
System Coverage
Economy system
►
►
►
Economy
Demand
Energy demand system
Supply
Price
s
Environment
GDP, demographics, exchange and interest rates
Activity by sector (18 sectors), income of households
Transport flows
►
►
►
Consumption habits, durable goods and comfort
Manufacturing technology, kind of industry and energy needs
Transportation modes/means and technologies as drivers of
energy needs
Energy supply system
►
►
►
Primary energy supply (depletable and renewable sources)
Secondary energy supply (power generation, refineries, etc.)
Energy System Balances
Energy Markets
►
Competition, price formation and regulation, import/export
Environment Impacts
►
►
►
30 October 2006
Energy-related emissions
Environmental impacts and pressures, damages
Preventive and corrective measures
E3M – Lab
6
Energy-Economy-Environment
System Coverage








12 industrial sectors, subdivided into 26 sub-sectors using energy in 12
generic processes (e.g. air compression, furnaces)
5 tertiary sectors, using energy in 6 processes (air conditioning, office
equipment)
4 dwelling types using energy in 5 processes and 12 types of electrical
durable goods (e.g. refrigerator, washing machine, television)
4 transport modes, 10 transport means and 10 vehicle technologies
14 fossil fuel types, 4 new fuel carriers (e.g. hydrogen, methanol,
biofuels) 10 renewable energy types
Sub-systems: power and steam generation, refineries, gas supply,
biomass supply(*), hydrogen supply(*), primary energy
150 power and steam technologies
7 types of emissions from energy processes (partly unabated)
30 October 2006
E3M – Lab
7
System Coverage
►
►
►
Geographical coverage
 Each EU-25 member-state taken individually
 In addition candidates and neighbours, such as
Bulgaria, Romania, Turkey, Norway, Switzerland
 Western Balkan countries (in 2007)
Network coverage
 Electricity and gas interconnections over Eurasia
 For electricity and gas markets, the European
countries can be taken all together
Time frame
 2000 to 2030 by five-years periods
 Seasonal and daily patterns for electricity, steam
and gas load
30 October 2006
E3M – Lab
8
Data input sources
► NEW CRONOS - EUROSTAT
 Energy Balance sheets (as available in Spring 2005)
 Macroeconomic data
 Population data and projection
► various databases developed under EC
programs
 MURE, ICARUS, ODYSEE – demand sectors
 SAPIENTIA, TECHPOL – supply technologies
► NEMS model database, US DOE
► UNIDO data
► Industry associations
► Various surveys and qualitative information
► Specifically commissioned studies
► Stakeholders’ consultations
30 October 2006
E3M – Lab
9
Energy-Economy-Environment
Models and their links
Transport activity
and flows
SCENES model
Macroeconomic/sectoral
activity GEM-E3 model
Energy
demand-supply
prices and
market equilibrium
for the EU area
World energy
oil, gas, coal
prices
POLES model
EU power plants – ESAP
Technologies: Tractebel
PRIMES
EU refineries - IFP
model
Renewables potential
ECN, Observer
Energy efficiency
Wuppertal, …
Environmental
impacts RAINS
30 October 2006
E3M – Lab
10
Input for a scenario with PRIMES
 GDP and economic growth per sector (many sectors)
 World energy supply outlook – world prices of fossil
fuels
 Tax and subsidy policies
 Interest rates, risk premiums, etc.
 Environmental policies and constraints
 Technical and economic characteristics of future energy
technologies
 Energy consumption patterns, Parameters affecting
supply curves for primary energy, siting potential for
new plants, parameters about comfort, rational use of
energy, tastes and habits
 Parameters of supply curves for primary energy, energy
savings, new sites, renewables potential…
30 October 2006
E3M – Lab
11
Output of a scenario
►
Per country and time period
 Detailed energy balance (EUROSTAT format)
► Electricity
►
demand per use and sector
 Transport activity, modes/means and vehicles
 Association of energy use and activities
 Power system investment and use of plants
 Energy supply per subsystem
 Energy costs, prices and investment expenses
 Emissions from energy
Additional material
 GDP and economic outlook
 World energy supply outlook
30 October 2006
E3M – Lab
12
Baseline and Scenarios
► Baseline
is a reference scenario used to
compare with alternative scenarios
 Baseline is not a forecast, nor the most likely
future
 Baseline should not overestimate nor
underestimate effect of current trends and
policies
► Alternative
scenarios do reflect new policies
and contrasted evolutions
30 October 2006
E3M – Lab
13
Available Documentation
►
PRIMES model description and manual are available at:
www.e3mlab.ntua.gr
currently available PRIMES manual refers to PRIMES ver.1
(update will be available later)
►
Description methodology and results are available
through reports and publications, e.g.
 European Energy and Transport: Scenarios on Key Drivers
(2005, DG-TREN)
 European Energy and Transport: Scenarios on energy
efficiency and renewables (2006, DG-TREN)
 Economic analysis of EU climate policy based on the
“European Energy and Transport – Trends to 2030” (2006, DGENV)
30 October 2006
E3M – Lab
14
Accessibility and engagement with MS
The PRIMES database is not available to general
public
► Key assumptions and detailed results are made
available to MS experts and other stakeholders for
comments and feedback, e.g.
►
 Energy economic analysts meetings (DG-TREN)
 CAFE program (DG-ENV)
►
Normally parameter values can be given upon
request to clients commissioning a study
 Especially when they are important in interpreting particular
results
►
Detailed PRIMES results are periodically published
 Under the responsibility of EC
30 October 2006
E3M – Lab
15
Database Update and Model
Development
► The
PRIMES model database is currently being
updated under the LREM project (DG-TREN):
 EUROSTAT statistics up to 2004 and available information
for 2005, 2006
 Revision of the power plant database, including information
on new constructions and projects as well as technoeconomic data on CCS
 Updated information on prices, taxes and tariffs
 Updated information about renewables: potential, non
linear cost curves, learning by doing, etc.
►A
new version of PRIMES is currently in the
process of being developed
 Extension of time horizon to 2050
 Biomass supply - biorefineries
 Hydrogen economy
30 October 2006
E3M – Lab
16
Thank you for your
attention
E3M – Lab