Models

EMMA

EMMA is short for Energy and Environmental Models for ADAM and is a macroeconomic tool. The model is a satellite model to ADAM, and was earlier developed at Statistics Denmark, but from October 2008 EMMA was moved to Danish Energy Agency.

Brief description of EMMA

EMMA acts as a satellite model to ADAM on both data and software side. ADAM is a macro-econometric model of the Danish economy, developed at Statistics Denmark and is used particularly of ministries, banks and interest groups. EMMA is a necessary tool to carry out environmental assessments of economic measures and can also be used to evaluate what effect a given finance bill will have on the environment. Scenarios by EMMA might for example provide an estimation of whether Denmark will meet its target of reducing CO2 emissions, and impact calculations can then give their opinions on how much energy taxes (or other factors) can contribute.

The story of EMMA

For many years, EMMA was developed at Statistics Denmark alongside with ADAM, but from October 2008 EMMA has been managed and developed by Danish Energy Agency. Currently the maintenance of EMMA is funded and development by Energinet.dk, Danish Energy Association and Danish Energy Agency jointly. Companies are using the EMMA-model to make scenarios of energy consumption based on an economic growth cycle.

Information and documentation

For further information, recent documentation and working papers from 2008 can be downloaded from the Danish website. The documentation is only a temporary draft and should not be referred to without an agreement with Danish Energy Agency. The new documentation is an update of the documents from 1997, which are also available. Furthermore, additional information on EMMA can be retrieved from Statistics Denmark's original site of the EMMA model.

IntERACT

New climate- and energy policies can have profound impacts on both energy system and economy. IntERACT is a model that can shed light on these impacts. The purpose of the model is to give a solid foundation to guide and inform policy makers.

Access to plenty and affordable energy is of great importance to the economy, and it is climate and energy policy that set the regulatory framework for the energy system. This strong interdependence between economy, energy and policy is the fulcrum for IntERACT1.

IntERACT strengthens the analytical foundations for climate and energy policy

IntERACT is developed with a focus on a comprehensive description of the Danish economy and the Danish energy system, with keen attention to the interactions of economy and energy system. For example how energy policy impacts the economy through the energy system, and vice versa.

For instance, an introduction of regulation or taxes with the purpose of limiting or promoting the use of specific fuels will influence significantly how the energy system evolves over time, ie. which types of power plants are build, how they are run and what the cost of energy is to households and industry.

The price of energy affects consumption choices of agents, for example by limiting disposable income of households or changing consumption patterns, or by changing the production costs for industry thus affecting the international competitiveness of Danish industry. Whereas  the overall economic activity in return determines how much energy is demanded.

IntERACT links economic and technical modelling

The IntERACT-model consists of two models. The first is an economic model that describes the macroeconomic flows and market interactions using a neoclassical computable general equilibrium model framework. The second is a detailed, technical energy system model, which is a Danish version of the internationally used TIMES-model2. The strength of IntERACT lies in the models ability to describe fundamental economic relationships based on economic theory, and at the same time keep track of thermodynamics, physical laws and technology development.

The economic model keeps track of monetary flows. These are wages on the labour market, government surplus or deficits, production across sectors, household income, consumption and savings, as well as foreign trade and international capital flows.

The technical model keeps track on how the energy system works. How and where is electricity and heat produced, what technologies are in use, how and where is energy transported through power and heating grids, how much energy is traded internationally, and how large are investments in the energy sector. In addition, the model tracks the consumption side, ie. how energy is used by households and industry, and what and how much energy efficiency potentials are utilised.

An improved tool for counterfactual analyses

It is important to stress that IntERACT is a tool for counterfactual analyses. It is a tool that can estimate the overall impacts for both economy and energy system from changes in climate and energy policy. In essence, this means that IntERACT can estimate changes to for example GDP, foreign trade, sector distribution and income, and evaluate changes to use of coal, oil, gas, renewables and district heating.

Documentation of IntERACT

The team behind IntERACT continually develop the model and produce documentation of the model setup, characteristics and data. This work is published on this webpage.

The views expressed in the Working Paper Series represent work in progress, and do not necessarily represent those of the Danish Energy Agency or policies of the Danish Ministry of Energy, Utilities and Climate. The papers do not themselves represent policy advice in any form.

The papers are internal working papers published in good faith to inform a wide audience. While every effort is made to keep available working papers current, papers, its employees or agents make no warranty, expressed or implied, as to the accuracy of the information presented herein.

The Working Paper Series include work undertaken by Danish Energy Agency staff as well as work undertaken external researchers or consultants.

IntERACT is funded in the Danish Energy Agreement and is housed by the Danish Energy Agency

The project was initiated by the Danish Energy Agreement from 22 March 2012 that stipulates the construction of a general equilibrium model for Denmark and the Danish energy system. The development is funded by 15.2 mill. DKK over the period 2012-2015. The wording is:

The devolopment of a general equilibrium model of the Danish energy system and economy to identify effectivy policies and future regulatory initiatives (own translation).

The work is housed in the Danish Energy Agency in order to tap in to the synergies from the expertise and modelling tools already present there.

 

Documentation


1) Integrated Economic eneRgy Applied Computational Tool.

2) For more information on TIMES, see http://www.iea-etsap.org/

Ramses

Ramses (version 6) is a techno-economic model describing the production of electricity and district heating in an arbitrary number of areas, currently the Nordic countries.
Linear optimization model

Ramses is a semi-linear optimization model that can calculate production, fuel consumption etc. on a very large number of plants on an hourly basis. Since the model is primarily intended for analyses of effects in Denmark, the Danish plants are currently described in more detail than the plants of other Nordic countries.

Electricity prices

The model also calculates the price of electricity, which creates balance in the market. In the electricity sector the Nordic countries are divided into 5 fields separated by transmission links with a maximum transmission capacity. If the transmission demand exceeds capacity, it is possible to get different electricity prices in the areas. The five areas are Finland, Sweden, Norway, West and East Denmark. At the district heating sector there are far more isolated areas, each with its own price.

Other inputs

Besides information about the transmission links, detailed information on plant type, efficiency and size, the model has the following input: fuel prices, prices of CO2 emissions, fuel taxes, as well as electricity and water heating demand. Output from the model is production, fuel consumption, emissions of the individual plants and prices of electricity in each area.

Method for the Model

The model works in the way that all plants in each area are sorted by the short-term, marginal production cost of electricity. The works are to produce one by one – starting by the cheapest – and continues until the demand (including any need to export or import) of each operating hour is satisfied. Hence, the marginal cost of the most expensive plant determines the price of electricity in the area. Large hydropower is treated in a special way, because the water from the reservoirs can shift the timing of production from strategic considerations.

Investments in the model

The decision of investment in new plants are going on outside the model. There will only be invested if the calculations of the model show that the plant can earn the investment back, with assumptions about contribution rates for a given renewable energy (especially wind), free CO2 emissions to fossil-based plants, etc. Plants located in an area with a need for district heating typically have a competitive advantage because of the revenue from heat sales.

Security of supply

Besides prices and quantities the model may provide an estimate of the overall supply of electricity. This is happening in light of stocastic input describing the probability of damage on plants or transmission links, time series on production from wind and hydropower and consumption variability.

Application of the model

Ramses is used for both scenarios and analyses. For example, it has been used for analyses on the impact of new transmission links, new wind farms, changes in consumption of electricity or changed prices on fuel and CO2 emissions. For more information see: A very detailed and technical description of Ramses (in Danish).

Elmodel-bolig

Elmodel-bolig is a forecasting tool for the Danish housing sector's electricity consumption. The model is financed by Energinet.dk, Danish Energy Association, Savingtrust and Danish Energy Agency.
Elmodel-bolig describes the electricity consumption of households based on various appliances diffusion, effectiveness and useful life.

The model is using data on the household’s amount of power equipments. Data have been collected every other year since 1974 for approximately 2000 households, representative spread across type of housing, location, etc. The model operates with just 30 specific device types, described by their diffusion, application rate and specific power consumption and size and lifetime distributions.

From these data are made scenarios of electricity consumption valid for the Danish housings. Here the effect of assumptions for certain appliances or appliance groups can be calculated.

Visit Elmodel-bolig

COMPARE

COMPARE is the Danish Energy Agency’s global carbon market model for analyzing the effect of climate change agreements on global greenhouse gas emissions and global costs of abatement at sector, country and regional level. The model utilizes the principle of cost-effectiveness to minimize abatement costs by reducing emissions where abatement options are cheapest.

International negotiations and COMPARE

The Danish Energy Agency (DEA) uses the model in a variety of analyses work but focus is especially on analyses of individual/aggregate ambition of countries’ Intended Nationally Determined Contributions (INDCs). Countries are currently in the phase of submitting their INDCs to the United Nations Framework Convention on Climate Change (UNFCCC) to be used at the Conference of Parties (COP) negotiations. Furthermore, the model participates in external working groups of the EU Commission’s climate department: Directorate-General for Climate Action (DG CLIMA) and in cooperation with the UK’s Department of Energy and Climate Change (DECC). In the fall of 2015 the model is used to provide analytical input for the upcoming UNEP Emissions Gap report. Finally, the DEA utilize the model internally for global- and EU-focused analyses and for analyses on specific countries in the DEA’s country-collaboration program, between Denmark and e.g. Mexico.

Overview of the model

COMPARE is a tool for analyzing regimes of international climate change agreements. The model offers quantified estimates of trade volumes and costs of abatement for key emitting countries and regions of the world. Where some models only look at CO2-individually COMPARE brings CO2, non-CO2 and LULUCF data sources into one model and thus provides a holistic picture of all GHG emissions. The model looks at global greenhouse gas emissions and the options available for abatement from 2015 up to 2050, in 5-year intervals.

Short on methodology

The COMPARE model is based on the principle of cost effectiveness, i.e. equalizing marginal cost of abatement across sectors and countries participating in a market to minimize overall costs to society. Cost-effectiveness is the analysis of the least cost means of meeting some target of environmental outcome, without questioning this target (Perman et al., 2003). This methodology utilizes the difference in abatement options, and thus abatement costs, between different countries and sectors together with a reduction objective to determine a market price.

For more information we refer to the methodology paper.

Analyzing the 2030 emissions gap