Prospective Outlook on Long-term Energy Systems (POLES) is a world simulation model for the
energy sector
The energy industry is the totality of all of the industries involved in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution. Modern society consumes large amounts of fuel, and the energy indust ...
that runs on the
Vensim software. It is a techno-economic model with endogenous projection of energy prices, a complete accounting of energy demand and supply of numerous energy vectors and associated technologies, and a carbon dioxide and other greenhouse gases emissions module.
History
POLES was initially developed in the early 1990s in the Institute of Energy Policy and Economics IEPE (now EDDEN-CNRS) in
Grenoble
lat, Gratianopolis
, commune status = Prefecture and commune
, image = Panorama grenoble.png
, image size =
, caption = From upper left: Panorama of the city, Grenoble’s cable cars, place Saint- ...
, France. It was conceived on the basis of research issues related to global energy supply and
climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
and the long-term impact of
energy policies. It was initially developed through a detailed description of sectoral energy demand, electricity capacity planning and fossil fuel exploration and production in the different world regions. Along its development it incorporated theoretical and practical expertise in many fields such as mathematics, economics, engineering, energy analysis, international trade and technical change.
The initial development of POLES was financed by the JOULE II and III programmes of the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
’s Third and Fourth
Framework Programmes (FP) for Research and Technological Development (1990-1994 and 1994-1998) as well as by the French CNRS. Since then, the model has been developed extensively through several projects, some partly financed by FP5, FP6 and FP7, and in collaboration between the EDDEN-CNRS, the consulting company Enerdata and the European
Joint Research Centre
The Joint Research Centre (JRC) is the European Commission's science and knowledge service which employs scientists to carry out research in order to provide independent scientific advice and support to European Union (EU) policy. The JRC is ...
IPTS.
With a history spanning twenty years, it is one of the few energy models worldwide that benefits from a continuous development process and expertise over such an extended time period.
Structure
The model provides a complete system for the simulation and economic analysis of the world’s energy sector up to 2050. POLES is a partial equilibrium model with a yearly recursive simulation process with a combination of price-induced behavioural equations and a cost- and performance-based system for a large number of energy or energy-related technologies. Contrary to several other energy sector models, international energy prices are endogenous. The main exogenous variables are the gross domestic product and population for each country or region.
The model’s structure corresponds to a system of interconnected modules and articulates three levels of analysis: international energy markets, regional energy balances, and national energy demand (which includes new technologies, electricity production, primary energy production systems and sectoral
greenhouse gas emissions
Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and lar ...
).
POLES breaks down the world into 66 regions, of which 54 correspond to countries (including the 28 countries of the European Union) and 12 correspond to countries aggregates; for each of these regions, a full energy balance is modelled. The model covers 15 energy demand sectors in each region.
Demand sectors
Each demand sector is described with a high degree of detail, including activity indicators, short- and long-term energy prices and associated elasticities and technological evolution trends (thus including the dynamic cumulative processes associated with technological learning curves). This allows a strong economic consistency in the adjustment of supply and demand by region, as relative price changes at a sectoral level impact all key component of a region’s sector. Sectoral value added is simulated.
Energy demand for each fuel in a sector follows a market share-based competition driven by energy prices and factors related to policy or development assumptions.
The model is composed of the following demand sectors:
* Residential and Tertiary: two sectors.
* Industry:
** Energy uses in industry: four sectors, allowing for a detailed modelling of such energy-intensive industries such as the steel industry, the chemicals industry and the non-metallic minerals industry (cement, glass).
** Non-energy uses in industry: two sectors, for the transformation sectors such as plastics production and chemical feedstock production.
* Transport: four sectors (air, rail, road and other). Road transport modelling comprises several vehicle types (passenger cars, merchandise heavy trucks) and allows the study of inter-technology competition with the penetration of alternative vehicles (hybrids, electric or fuel cell vehicles).
* International bunkers: two sectors.
* Agriculture: one sector.
Oil and gas supply
There are 88 oil and gas production regions with inter-regional trade; these producing regions supply the international energy markets, which in turn feed the demand of the 66 aforementioned world regions. Fossil fuel supply modelisation includes a technological improvement in the oil recovery rate, a linkage between new discoveries and cumulative drilling and a feedback of the reserves/production ratio on the oil price. OPEC and non-OPEC production is differentiated. The model includes non-conventional oil resources such as
oil shales and
tar sands
Oil sands, tar sands, crude bitumen, or bituminous sands, are a type of unconventional petroleum deposit. Oil sands are either loose sands or partially consolidated sandstone containing a naturally occurring mixture of sand, clay, and wate ...
.
Power Generation
There are 30 electricity generation technologies, among which several technologies that are still marginal or planned, such as thermal production with
carbon capture and storage
Carbon capture and storage (CCS) or carbon capture and sequestration is the process of capturing carbon dioxide (CO2) before it enters the atmosphere, transporting it, and storing it (carbon sequestration) for centuries or millennia. Usually th ...
or
new nuclear designs. Price-induced diffusion tools such as
feed-in tariff
A feed-in tariff (FIT, FiT, standard offer contract,Couture, T., Cory, K., Kreycik, C., Williams, E., (2010)Policymaker's Guide to Feed-in Tariff Policy Design National Renewable Energy Laboratory, U.S. Dept. of Energy advanced renewable tariff, ...
s can be included as drivers for projecting the future development of new energy technologies.
The model distinguishes four typical daily
load curve
In electrical engineering, a load profile is a graph of the variation in the electrical load versus time. A load profile will vary according to customer type (typical examples include residential, commercial and industrial), temperature and hol ...
s in a year, with two-hour steps. The load curves are met by a generation mix given by a merit order that is based on marginal costs of operation, maintenance and annualized capital costs. Expected power demand over the year influences investment decisions for new capacity planning in the next step.
Emissions and carbon price
The model includes accounting of
greenhouse gas (GHG) emissions and allows visualising GHG flows on sectoral, regional and global levels. POLES covers fuel combustion-related emissions in all demand sectors, thus covering over half of global GHG emissions. The six
Kyoto Protocol
The Kyoto Protocol was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that (part ...
GHGs are covered (carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons and perfluorocarbons).
The model can be used to test the sensibility of the energy sector to the
carbon price
Carbon pricing (or pricing), also known as cap and trade (CAT) or emissions trading scheme (ETS), is a method for nations to reduce global warming. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the co ...
as applied to the price of fossil fuels on a regional level, as envisaged or experimented by
cap and trade
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emission t ...
systems like the EU’s
Emissions Trading Scheme
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emission t ...
.
Databases
The model’s databases have been developed by IPTS, EDDEN and Enerdata. Data on technological costs and performances were provided by the TECHPOL database. The data for historical energy demand, consumption and prices are compiled and provided by Enerdata.
Uses
The POLES model can be used to study or test the effect of different energy resources assumptions or energy policies and assess the importance of various driving variables behind energy demand and the penetration rates of certain electricity generation or end-use technologies. POLES does not directly provide the macro-economic impact of mitigation solutions as envisaged by the
Stern Review
The Stern Review on the Economics of Climate Change is a 700-page report released for the Government of the United Kingdom on 30 October 2006 by economist Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environm ...
, however it allows a detailed assessment of the costs associated with the development of low- or
zero-carbon
Carbon neutrality is a state of net-zero carbon dioxide emissions. This can be achieved by balancing emissions of carbon dioxide with its removal (often through carbon offsetting) or by eliminating emissions from society (the transition to the "p ...
technologies.
Linked with GHG emissions profiles, the model can produce
marginal abatement cost curves (MACCs) for each region and sector at a desired time; these can be used to quantify the costs related to GHG emissions reduction or as an analysis tool for strategic areas for emissions control policies and emissions trading systems under different market configurations and trading rules.
Studies including POLES simulations have been commissioned by international bodies such as several Directorates-General of the European Commission, national energy, environment, industry and transport agencies or private actors in the energy sector.
Criticism
POLES can model changes in sectoral value added and shifts of activity between sectors. However POLES is not a macroeconomic model in the sense that it uses the
gross domestic product
Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...
as an input and includes no feedback on it that could result from the evolution of the energy system: carbon pricing, falling oil production and its effect on transport and mobility, or growth induced by technological innovation (such as the IT boom of the 1990s). As such, it does not provide the total impact on society of, e.g.,
climate adaptation
Climate change adaptation is the process of adjusting to current or expected effects of climate change.IPCC, 2022Annex II: Glossary öller, V., R. van Diemen, J.B.R. Matthews, C. Méndez, S. Semenov, J.S. Fuglestvedt, A. Reisinger (eds.) InClimat ...
or mitigation (it does however quantify the total cost to the energy sector, including investment necessary in the development of low-carbon technologies).
The model does not cover all greenhouse gases emissions, notably those related to agriculture (in part),
land use, land-use change and forestry
Land use, land-use change, and forestry (LULUCF), also referred to as Forestry and other land use (FOLU), is defined by the United Nations Climate Change Secretariat as a " greenhouse gas inventory sector that covers emissions and removals of gr ...
. As such, the climate component of the model does not allow to fully project GHG stocks, concentrations and associated temperature rises from
anthropogenic climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
.
Economic Assessment of Post-2012 Global Climate Policies using POLES and GEM-E3
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See also
* Energy economics
Energy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Considering the cost of energy services and associated value gives economic meaning to the efficiency at which energy c ...
* Energy modeling
Energy modeling or energy system modeling is the process of building computer models of energy systems in order to analyze them. Such models often employ scenario analysis to investigate different assumptions about the technical and economic c ...
* Energy policy
Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contri ...
* UNFCCC
The United Nations Framework Convention on Climate Change (UNFCCC) established an international environmental treaty to combat "dangerous human interference with the climate system", in part by stabilizing greenhouse gas concentrations in the ...
External links
Enerdata
LEPII-EPE
JRC IPTS
References
{{Energy modeling
Energy economics
Energy models