FEEM working papers "Note di lavoro" series
2019 .017

Economic Disruptions in Long-Term Energy Scenarios – Implications for Designing Energy Policy


Authors: Kristina Govorukha, Philip Mayer, Dirk Rübbelke, Stefan Vögele
Series: Future Energy Program
Editor: Manfred Hafner
Keywords: Scenario Analysis, Electricity Markets, Economic Development, Energy Market Modelling, Uncertainty, Macroeconomic Cycles, Electricity Production
JEL n.: Q4, Q43

Abstract

The main drivers of transformation processes of electricity markets stem from climate policies and changing economic environments. In order to analyse the respective developments, modelling approaches regularly rely on multiple structural and parametric simplifications. For example, discontinuities in economic development (recessions and booms) are frequently disregarded. Distorting effects that are caused by such simplifications tend to scale up with an extension of the time horizon of the analysis and can significantly affect the accuracy of long-term projections. In this study, we include information on economic discontinuities and elaborate on their influences on short-and long-term modelling outcomes. Based on historical data, we identify the impact of a high-amplitude change in economic parameters and examine its cumulative effect on the German electricity market by applying a techno-economic electricity market model for the period from 2005 to 2014. Similar changes may consistently occur in the future and we expect that a more comprehensive understanding of their effects on long-term scenarios will increase the validity of long-term models. Results indicate that policy decision making based on modelling frameworks can benefit from a comprehensive understanding of the underlying simplifications of most scenario studies.

***

Suggested citation: Govorukha, K., P. Mayer, D. Rübbelke, S. Vögele, (2019), 'Economic Disruptions in Long-Term Energy Scenarios – Implications for Designing Energy Policy', Nota di Lavoro 17.2019, Milano, Italy: Fondazione Eni Enrico Mattei.

Download file
Download PDF file

FEEM Newsletter

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree