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Bridging the gap using energy services: Demonstrating a novel framework for soft linking top-down and bottom-up models

Author:
Andersen, Kristoffer S., Termansen, Lars B., Gargiulo, Maurizio, Ó Gallachóirc, Brian P.
Source:
Energy 2019 v.169 pp. 277-293
ISSN:
0360-5442
Subject:
carbon, carbon sequestration, climate, coal, concrete, energy, issues and policy, macroeconomics, models
Abstract:
Giving policy advice related to climate mitigation requires insights that take both sectoral and technology effects (and their interactions) into account. This paper develops a novel soft-linking method for bridging the gap between sectoral top-down and technology rich bottom-up models. A unique feature of the approach is the explicit modelling of energy service demand in the top-down model, which creates a direct correspondence to the energy service production in the bottom-up model. This correspondence allows us, unlike previous work, to capture the macroeconomic impact of energy system investment flows. The paper illustrates the full-scale application of the method in the Danish IntERACT model, considering the unilateral introduction of coal carbon capture and storage in the Danish concrete sector. The policy leads to a reduction in the Danish concrete production, and in turn, a carbon leakage effect of 88%. Results also underscores the importance of accounting for the macroeconomic impact of energy system investment flows, as this is the source of approximately half of the policy-induced reduction in macroeconomic activity.
Agid:
6255347