Energy systems and markets
Research Area 2, Energy systems and markets, employs equilibrium and optimisation models to numerically analyse policies and economics of future energy systems.
We perform numerical analyses of future energy systems, distinguishing between equilibrium models capable of modelling competition and market power and optimisation models assuming either a perfectly competitive market and/or maximisation of a joint objective for the different players.
The RA sets out to answer questions like
- How do national climate targets impact the energy system?
- How do different transition strategies affect energy supply, energy prices, and greenhouse gas (GHG) emission?
- How can the Norwegian energy system contribute to GHG reduction in neighbouring countries?
- How may energy system models capture issues of political support and technological uncertainty?
- What are important barriers for energy efficiency and drivers of end use demand?
- How do the development and regulation of the European energy markets influence the Norwegian and Nordic markets?
CenSES research partners will mainly use own models, but also models provided by our international partners. The energy system and market models will be used in connection with analyses of policy making and economic analysis in research area 1, research area 3 and research area 4, and for scenario analyses in research area 5. Public authorities and companies may contribute with model input, data and assumptions and use the model results in order to improve their decision and investment strategies.
2.1 Modelling technology learning, energy demand and energy efficiency has defined the interface and content of a technology database with technical and economic parameters relevant for energy systems and market analyses. The WP develops an improved modelling framework for technology learning, for projections of energy demand and for modelling energy efficiency in different end use sectors. It will also include an analysis of niche markets and early adopters and will cooperate with research area 1 and research area 4 on policy instruments, impact of barriers, and innovation and commercialisation.
2.2 Including new functionality in energy system and market models improves existing energy system and market models. These models comprise both optimisation models where perfect competition or a central planner is assumed and equilibrium models where also market power can be modelled. The WP has enhanced the modelling framework for projections of energy demand and energy efficiency in different end use sectors including various barriers for changing demand patterns and implementing energy efficient technologies and demand response. Given the development in the energy systems towards more variability and uncertainty in the supply side, the inclusion of short-term effects and uncertainty is of outmost importance. The WP cooperates with research area 3 on the link between regional economic models and energy system models.
2.3 Analysis of European, Norwegian and regional energy systems tests and uses the models developed and improved in WP 2.2 to analyse different transition pathways to a sustainable future energy system through scenario analyses and user cases. The models will be used in connection with analyses of policy making and economic analyses, covering a broad spectrum such as impact of CO2 restrictions, technological development and uncertainty, security of supply, and regulation of energy markets. The WP has close links to the scenario analysis in research area 5.