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

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  • Andersen, Kristoffer S.
  • Termansen, Lars B.
  • Gargiulo, Maurizio
  • Ó Gallachóirc, Brian P.

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.

Suggested Citation

  • Andersen, Kristoffer S. & Termansen, Lars B. & Gargiulo, Maurizio & Ó Gallachóirc, Brian P., 2019. "Bridging the gap using energy services: Demonstrating a novel framework for soft linking top-down and bottom-up models," Energy, Elsevier, vol. 169(C), pages 277-293.
  • Handle: RePEc:eee:energy:v:169:y:2019:i:c:p:277-293
    DOI: 10.1016/j.energy.2018.11.153
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