Treatment of (energy price) uncertainties in energy systems models


Volker Krey, Programme Group Systems Analysis and Technology Evaluation (STE), Research Centre, Julich

In view of the currently observed energy prices, recent price scenarios, which have been very moderate until 2004, also tend to favor high future energy prices. Having a large impact on energy-economic scenarios, we incorporate uncertain energy prices into an energy systems model by including a stochastic risk function. Energy systems models are frequently used to aid scenario analysis in energy-related studies. The impact of uncertain energy prices on the supply structures and the interaction with measures in the demand sectors is the focus of the present paper. For the illustration of the methodological approach, scenarios for our EU countries are presented. Including the stochastic risk function, elements of high energy price scenarios can be found in scenarios with a moderate future development of energy prices. In contrast to scenarios with stochastic investment costs for a limited number of technologies, the inclusion of stochastic energy prices directly affects all parts of the energy system. Robust elements of hedging strategies include increasing utilization of domestic energy carriers, the use of CHP and district heat and the application of additional energy-saving measures in the end-use sectors. Region-specific technology portfolios, i.e. different hedging options, can cause growing energy exchange between the regions in comparison with the deterministic case.

Venue: Keizer Karelplein 19, Maastricht

Date: 03 May 2007

Time: 16:00


UNU-MERIT