Stochastic MARKAL P.R. Shukla

Event Tree of Growth and Gas Price Uncertainties Numbers on the branches represent event probability

Implications of Uncertainty in Economic Growth Energy Consumption

Implications of Uncertainty in Economic Growth Gas Consumption

Implications of Uncertainty in Gas Price Gas Consumption

Implications of Uncertainty in Gas Price Coal Consumption

Implications of Uncertainty in Carbon Mitigation Gas Consumption

Implications of Uncertainty in Carbon Mitigation Coal Consumption

Implications of Gas Price (GP) and Growth Rate (GR) Gas Consumption

Implications of Gas Price (GP) and Growth Rate (GR) Coal Consumption

Implications of Gas Price(GP) and Carbon Mitigation Gas Consumption

Implications of Gas Price(GP) and Carbon Mitigation Coal Consumption

Implications of Gas Price(GP) and Carbon Mitigation Gas Consumption

Implications of Gas Price(GP) and Carbon Mitigation Coal Consumption

Renewable Energy Consumption (excluding Large Hydro) Implications of Gas Price(GP) and Carbon Mitigation

PeriodHighMediumLow Growth Scenarios - Compounded Annual Rate of Growth (%) of GDP

Gas Price Scenarios High Medium Low Gas price till 2010 Same as BAU Gas price after % above BAU Same as BAU 20% below BAU

Carbon Mitigation Scenarios - Cumulative Carbon Mitigation over BAU* * BAU cumulative emissions for the period is nearly 20 BtC HighMediumLow % Mitigation ( )25 %15 %Nil Mitigation till 2035 (BtC)53Nil

Probabilities Associated with Scenarios * Low mitigation scenario corresponds to no mitigation as in BAU ScenarioHighMediumLow Growth Gas price Carbon Mitigation*

Value of Information for Singular Uncertainty Cases (1993 $ Million) * EVPI: Expected Value of Perfect Information UncertaintyLowMediumHighEVPI* Gas Price Carbon Mitigation Growth

Value of Information for Joint Uncertainties in Growth and Gas Price (1993 $ Mill) * EVOI: Expected Value of Information Growth Gas PriceEVOI * for Growth LowMediumHigh Low Medium High EVOI*(Gas Price) EVPI = 3057

Value of Information for Joint Uncertainties in Carbon Mitigation Target and Growth (1993 $ Million) Carbon Mitigation GrowthEVOI for Carbon Mitigation LowMediumHigh Low Medium High EVOI for Growth EVPI = 4351

Value of Information for Joint Uncertainties in Gas Price and Carbon Mitigation Target (1993 $ Million) Carbon Mitigation Gas PriceEVOI for Carbon Mitigation LowMediumHigh Low Medium High EVOI of Gas Price EVPI = 3838

Analysis of Uncertainties and Implications Uncertainty EVPI * Main Hedging Strategy up to 2010 (Over BAU) Scenario with Highest EVOI and Preparation required after 2010 Growth2203  Additional investments in most energy resources/ technologies  Substantially higher  investments in gas and gas  based electricity Scenario: Low growth Preparation: Flexibility to down size investments, export of energy resources and electricity Gas Price565  Close to BAU investments Scenario: High gas price Preparation: Flexibility to up size investment in coal and renewable technologies Carbon Mitigation 2489  Close to BAU investments Scenario: High carbon mitigation Preparation: Flexibility to quickly raise investments in gas, gas electricity and renewables * Expected value of perfect information (in 1993 $ Million)

Analysis of Uncertainties and Implications * Expected value of perfect information (in 1993 $ Million) Uncertainty EVPI * Main Hedging Strategy up to 2010 (Over BAU) Scenario with Highest EVOI and Preparation required after 2010 Gas Price & Growth 3057  Additional investments in total energy  Substantial investments in coal and renewable tech.  Lower investments in gas, gas electricity Scenario: Low growth and low gas price Preparation: Flexibility to down size investments in coal (e.g. coal import) and quickly raise investments in gas and gas electricity Carbon Mitigation and Growth 4351  Additional investments in total energy  Substantial investments in gas, and overcoming barriers to renewables and nuclear energy  Lower investments in coal Scenario: Low growth and low carbon mitigation Preparation: Flexibility to downsize investments in gas and raise investments in coal Gas Price & Carbon Mitigation 3838  Close to BAU investments Scenario: Low gas price and High carbon mitigation Preparation: Flexibility for high renewable energy and gas imports