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

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

Energy, 2019, vol. 169, issue C, 277-293

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.

Keywords: Bottom-up; Top-down; Hybrid modelling; Energy service demand; Mixed complementarity; Carbon capture and storage (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:169:y:2019:i:c:p:277-293

DOI: 10.1016/j.energy.2018.11.153

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