IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v306y2022ipbs0306261921013696.html
   My bibliography  Save this article

Improving the representation of energy efficiency in an energy system optimization model

Author

Listed:
  • Patankar, Neha
  • Fell, Harrison G.
  • Rodrigo de Queiroz, Anderson
  • Curtis, John
  • DeCarolis, Joseph F.

Abstract

Energy system optimization models (ESOMs) are designed to examine the potential effects of a proposed policy, but often represent energy-efficient technologies and policies in an overly simplified way. Most ESOMs include different end-use technologies with varying efficiencies and select technologies for deployment based solely on least-cost optimization, which drastically oversimplifies consumer decision-making. In this paper, we change the structure of an existing ESOM to model energy efficiency in way that is consistent with microeconomic theory. The resulting model considers the effectiveness of energy-efficient technologies in meeting energy service demands, and their potential to substitute electricity usage by conventional technologies. To test the revised model, we develop a simple hypothetical case and use it to analyze the welfare gain from an energy efficiency subsidy versus a carbon tax policy. In the simple test case, the maximum recovered welfare from an efficiency subsidy is less than 50% of the first-best carbon tax policy.

Suggested Citation

  • Patankar, Neha & Fell, Harrison G. & Rodrigo de Queiroz, Anderson & Curtis, John & DeCarolis, Joseph F., 2022. "Improving the representation of energy efficiency in an energy system optimization model," Applied Energy, Elsevier, vol. 306(PB).
  • Handle: RePEc:eee:appene:v:306:y:2022:i:pb:s0306261921013696
    DOI: 10.1016/j.apenergy.2021.118083
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261921013696
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.apenergy.2021.118083?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Palmer, Karen & Paul, Anthony, 2015. "A Primer on Comprehensive Policy Options for States to Comply with the Clean Power Plan," RFF Working Paper Series dp-15-15, Resources for the Future.
    2. ., 2017. "The concept of economic welfare," Chapters, in: Morality and Power, chapter 6, pages 59-68, Edward Elgar Publishing.
    3. Kenneth Gillingham & Richard G. Newell & Karen Palmer, 2009. "Energy Efficiency Economics and Policy," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 597-620, September.
    4. ., 2021. "Energy security," Chapters, in: The Global Rise of the Modern Plug-In Electric Vehicle, chapter 3, pages 73-109, Edward Elgar Publishing.
    5. Sorrell, Steve, 2015. "Reducing energy demand: A review of issues, challenges and approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 74-82.
    6. Hunter, Kevin & Sreepathi, Sarat & DeCarolis, Joseph F., 2013. "Modeling for insight using Tools for Energy Model Optimization and Analysis (Temoa)," Energy Economics, Elsevier, vol. 40(C), pages 339-349.
    7. Zenon Wisniewski & Wiktor Kordys, 2021. "State Aid Evolution in the Polish Energy Sector," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 785-810.
    8. Andrea Baranzini & Jeroen van den Bergh & Stefano Carattini & Richard Howarth & Emilio Padilla & Jordi Roca, 2015. "Seven Reasons to Use Carbon Pricing in Climate Policy," Working Papers wpdea1507, Department of Applied Economics at Universitat Autonoma of Barcelona.
    9. Harrison Fell & Daniel Kaffine & Daniel Steinberg, 2017. "Energy Efficiency and Emissions Intensity Standards," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(S1), pages 201-226.
    10. Felix Creutzig & Joyashree Roy & William F. Lamb & Inês M. L. Azevedo & Wändi Bruine de Bruin & Holger Dalkmann & Oreane Y. Edelenbosch & Frank W. Geels & Arnulf Grubler & Cameron Hepburn & Edgar G. H, 2018. "Towards demand-side solutions for mitigating climate change," Nature Climate Change, Nature, vol. 8(4), pages 260-263, April.
    11. Cheng, Zhiming & Tani, Massimiliano & Wang, Haining, 2021. "Energy poverty and entrepreneurship," Energy Economics, Elsevier, vol. 102(C).
    12. Kang Yanbing & Wei Qingpeng, 2005. "Analysis of the impacts of building energy efficiency policies and technical improvements on China's future energy demand," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 24(3/4), pages 280-299.
    13. Horne, Matt & Jaccard, Mark & Tiedemann, Ken, 2005. "Improving behavioral realism in hybrid energy-economy models using discrete choice studies of personal transportation decisions," Energy Economics, Elsevier, vol. 27(1), pages 59-77, January.
    14. van Zoest, Vera & El Gohary, Fouad & Ngai, Edith C.H. & Bartusch, Cajsa, 2021. "Demand charges and user flexibility – Exploring differences in electricity consumer types and load patterns within the Swedish commercial sector," Applied Energy, Elsevier, vol. 302(C).
    15. Paul J. Burke and Ashani Abayasekara, 2018. "The Price Elasticity of Electricity Demand in the United States: A Three-Dimensional Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    16. McNeil, Michael A. & Iyer, Maithili & Meyers, Stephen & Letschert, Virginie E. & McMahon, James E., 2008. "Potential benefits from improved energy efficiency of key electrical products: The case of India," Energy Policy, Elsevier, vol. 36(9), pages 3467-3476, September.
    17. Binod Prasad Koirala & Ellen C. J. van Oost & Esther C. van der Waal & Henny J. van der Windt, 2021. "New Pathways for Community Energy and Storage," Energies, MDPI, vol. 14(2), pages 1-8, January.
    18. Diao, Qinghua & Sun, Wei & Yuan, Xinmei & Li, Lili & Zheng, Zhi, 2016. "Life-cycle private-cost-based competitiveness analysis of electric vehicles in China considering the intangible cost of traffic policies," Applied Energy, Elsevier, vol. 178(C), pages 567-578.
    19. ., 2021. "Equinor Energy by PwC," Chapters, in: Investigation Reports, chapter 9, pages 138-146, Edward Elgar Publishing.
    20. Kirchem, Dana & Lynch, Muireann Á. & Bertsch, Valentin & Casey, Eoin, 2020. "Modelling demand response with process models and energy systems models: Potential applications for wastewater treatment within the energy-water nexus," Applied Energy, Elsevier, vol. 260(C).
    21. DeCarolis, Joseph & Daly, Hannah & Dodds, Paul & Keppo, Ilkka & Li, Francis & McDowall, Will & Pye, Steve & Strachan, Neil & Trutnevyte, Evelina & Usher, Will & Winning, Matthew & Yeh, Sonia & Zeyring, 2017. "Formalizing best practice for energy system optimization modelling," Applied Energy, Elsevier, vol. 194(C), pages 184-198.
    22. Katharine Ricke & Laurent Drouet & Ken Caldeira & Massimo Tavoni, 2018. "Country-level social cost of carbon," Nature Climate Change, Nature, vol. 8(10), pages 895-900, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cui, Peng & Zhu, Wenbo & Ji, Hongjun & Chen, Hongtao & Hang, Chunjin & Li, Mingyu, 2022. "Analysis and optimization of induction heating processes by focusing the inner magnetism of the coil," Applied Energy, Elsevier, vol. 321(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yeo, Lip Siang & Teng, Sin Yong & Ng, Wendy Pei Qin & Lim, Chun Hsion & Leong, Wei Dong & Lam, Hon Loong & Wong, Yat Choy & Sunarso, Jaka & How, Bing Shen, 2022. "Sequential optimization of process and supply chains considering re-refineries for oil and gas circularity," Applied Energy, Elsevier, vol. 322(C).
    2. Diaz de Garayo, S. & Martínez, A. & Astrain, D., 2022. "Optimal combination of an air-to-air thermoelectric heat pump with a heat recovery system to HVAC a passive house dwelling," Applied Energy, Elsevier, vol. 309(C).
    3. Choi, Hyunhong & Woo, JongRoul, 2022. "Investigating emerging hydrogen technology topics and comparing national level technological focus: Patent analysis using a structural topic model," Applied Energy, Elsevier, vol. 313(C).
    4. Nordgård-Hansen, Ellen & Kishor, Nand & Midttømme, Kirsti & Risinggård, Vetle Kjær & Kocbach, Jan, 2022. "Case study on optimal design and operation of detached house energy system: Solar, battery, and ground source heat pump," Applied Energy, Elsevier, vol. 308(C).
    5. Delorme, Maxence & Santini, Alberto, 2022. "Energy-efficient automated vertical farms," Omega, Elsevier, vol. 109(C).
    6. Hassan, Aakash & Al-Abdeli, Yasir M. & Masek, Martin & Bass, Octavian, 2022. "Optimal sizing and energy scheduling of grid-supplemented solar PV systems with battery storage: Sensitivity of reliability and financial constraints," Energy, Elsevier, vol. 238(PA).
    7. Chen, Wei-Han & You, Fengqi, 2022. "Sustainable building climate control with renewable energy sources using nonlinear model predictive control," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    8. Stephen Littlechild, 2021. "The challenge of removing a mistaken price cap," Economic Affairs, Wiley Blackwell, vol. 41(3), pages 391-415, October.
    9. Ekaterina Rhodes & Kira Craig & Aaron Hoyle & Madeleine McPherson, 2021. "How Do Energy-Economy Models Compare? A Survey of Model Developers and Users in Canada," Sustainability, MDPI, vol. 13(11), pages 1-39, May.
    10. Felder, F.A. & Kumar, P., 2021. "A review of existing deep decarbonization models and their potential in policymaking," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).
    11. Rinaldi, Giovanni & Garcia-Teruel, Anna & Jeffrey, Henry & Thies, Philipp R. & Johanning, Lars, 2021. "Incorporating stochastic operation and maintenance models into the techno-economic analysis of floating offshore wind farms," Applied Energy, Elsevier, vol. 301(C).
    12. Yue, Xiufeng & Deane, J.P. & O'Gallachoir, Brian & Rogan, Fionn, 2020. "Identifying decarbonisation opportunities using marginal abatement cost curves and energy system scenario ensembles," Applied Energy, Elsevier, vol. 276(C).
    13. Woo, C.K. & Liu, Y. & Zarnikau, J. & Shiu, A. & Luo, X. & Kahrl, F., 2018. "Price elasticities of retail energy demands in the United States: New evidence from a panel of monthly data for 2001–2016," Applied Energy, Elsevier, vol. 222(C), pages 460-474.
    14. Finke, Jonas & Bertsch, Valentin, 2022. "Implementing a highly adaptable method for the multi-objective optimisation of energy systems," MPRA Paper 115504, University Library of Munich, Germany.
    15. Rosal, Ignacio del, 2022. "European dieselization: Policy insights from EU car trade," Transport Policy, Elsevier, vol. 115(C), pages 181-194.
    16. Lopion, Peter & Markewitz, Peter & Robinius, Martin & Stolten, Detlef, 2018. "A review of current challenges and trends in energy systems modeling," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 156-166.
    17. Becker, Jonathon M., 2023. "Tradable performance standards in a dynamic context," Resource and Energy Economics, Elsevier, vol. 73(C).
    18. Adom, Philip Kofi & Adams, Samuel, 2018. "Energy savings in Nigeria. Is there a way of escape from energy inefficiency?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2421-2430.
    19. Salvucci, Raffaele & Tattini, Jacopo & Gargiulo, Maurizio & Lehtilä, Antti & Karlsson, Kenneth, 2018. "Modelling transport modal shift in TIMES models through elasticities of substitution," Applied Energy, Elsevier, vol. 232(C), pages 740-751.
    20. Mehigan, L. & Deane, J.P. & Gallachóir, B.P.Ó. & Bertsch, V., 2018. "A review of the role of distributed generation (DG) in future electricity systems," Energy, Elsevier, vol. 163(C), pages 822-836.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:306:y:2022:i:pb:s0306261921013696. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.