Prospective Outlook on Long-term Energy Systems
Encyclopedia
Prospective Outlook on Long-term Energy Systems (POLES) is a world simulation model for the energy sector
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.
, France. It was conceived on the basis of research issues related to global energy supply and climate change
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
’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 LEPII, the consulting company Enerdata and the European Joint Research Centre 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.
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).
POLES breaks down the world into 57 regions, of which 45 correspond to countries (including the 27 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 13 energy demand sectors in each region.
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:
.
or new nuclear designs
. Price-induced diffusion tools such as feed-in tariffs
can be included as drivers for projecting the future development of new energy technologies.
The model distinguishes four typical daily load curves
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.
(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
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 as applied to the price of fossil fuels on a regional level, as envisaged or experimented by cap and trade systems like the EU’s Emissions Trading Scheme.
, however it allows a detailed assessment of the costs associated with the development of low- or zero-carbon
technologies.
Linked with GHG emissions profiles, the model can produce marginal abatement cost curves (MACCs) for each region 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.
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 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
. 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.
Energy economics
Energy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Due to diversity of issues and methods applied and shared with a number of academic disciplines, energy economics does not present itself as a self contained academic...
that runs on the Vensim
Vensim
Vensim is a simulation software made by Ventana Systems, Inc. . Its purpose is to help companies to find an optimal solution for various situations that need analysis and where it's necessary to find out all possible results of future implementation or decision.Vensim is able to simulate dynamic...
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 LEPII-CNRS) in GrenobleGrenoble
Grenoble is a city in southeastern France, at the foot of the French Alps where the river Drac joins the Isère. Located in the Rhône-Alpes region, Grenoble is the capital of the department of Isère...
, France. It was conceived on the basis of research issues related to global energy supply and climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
and the long-term impact of energy policies
Energy policy
Energy policy is the manner in which a given entity has decided to address issues of energy development including energy production, distribution and consumption...
. 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
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
’s Third and Fourth Framework Programmes (FP) for Research and Technological Development
Framework Programmes for Research and Technological Development
The Framework Programmes for Research and Technological Development, also called Framework Programmes or abbreviated FP1 through FP8, are funding programmes created by the European Union in order to support and encourage research in the European Research Area...
(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 LEPII, the consulting company Enerdata and the European Joint Research Centre IPTS
Institute for Prospective Technological Studies
The Institute for Prospective Technological Studies or IPTS, located in Seville, Spain, is one of the seven institutes of the Joint Research Centre , a Directorate-General of the European Commission .- Fields of expertise :...
.
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).
POLES breaks down the world into 57 regions, of which 45 correspond to countries (including the 27 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 13 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).
- Agriculture: one sector.
Oil and gas supply
There are 71 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 57 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 sandsTar sands
Bituminous sands, colloquially known as oil sands or tar sands, are a type of unconventional petroleum deposit. The sands contain naturally occurring mixtures of sand, clay, water, and a dense and extremely viscous form of petroleum technically referred to as bitumen...
.
Power Generation
There are 26 electricity generation technologies, among which several technologies that are still marginal or planned, such as thermal production with carbon capture and storageCarbon capture and storage
Carbon capture and storage , alternatively referred to as carbon capture and sequestration, is a technology to prevent large quantities of from being released into the atmosphere from the use of fossil fuel in power generation and other industries. It is often regarded as a means of mitigating...
or new nuclear designs
Generation IV reactor
Generation IV reactors are a set of theoretical nuclear reactor designs currently being researched. Most of these designs are generally not expected to be available for commercial construction before 2030...
. Price-induced diffusion tools such as feed-in tariffs
Feed-in Tariff
A feed-in tariff is a policy mechanism designed to accelerate investment in renewable energy technologies. It achieves this by offering long-term contracts to renewable energy producers, typically based on the cost of generation of each technology...
can be included as drivers for projecting the future development of new energy technologies.
The model distinguishes four typical daily load curves
Load curve
]A load curve is a chart showing the amount of electrical energy customers use over the course of time. Power producers use this information to plan how much electricity they will need to make available at any given time...
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 gasGreenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
(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
Kyoto Protocol
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change , aimed at fighting global warming...
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 as applied to the price of fossil fuels on a regional level, as envisaged or experimented by cap and trade systems like the EU’s Emissions Trading Scheme.
Databases
The model’s databases have been developed by IPTS, LEPII 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
This 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 ReviewStern Review
The Stern Review on the Economics of Climate Change is a 700-page report released for the British government on 30 October 2006 by economist Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and also chair of the Centre...
, however it allows a detailed assessment of the costs associated with the development of low- or zero-carbon
Low-carbon economy
A Low-Carbon Economy or Low-Fossil-Fuel Economy is an economy that has a minimal output of greenhouse gas emissions into the environment biosphere, but specifically refers to the greenhouse gas carbon dioxide...
technologies.
Linked with GHG emissions profiles, the model can produce marginal abatement cost curves (MACCs) for each region 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 productGross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
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 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
Land use, land-use change and forestry is defined by the United Nations Climate Change Secretariat as "A greenhouse gas inventory sector that covers emissions and removals of greenhouse gases resulting from direct human-induced land use, land-use change and forestry activities."LULUCF has impacts...
. 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.