1. Hillard Huntington Energy Modeling Forum Stanford, CA International Energy Workshop Venice, ItalyJune 17, 2009 Efficiency and the Shape of Future Energy Demand: Initial Findings from Energy Modeling Forum Study 25

2. 2 Today’s Discussion Rediscovery of energy efficiency improvements Organization/purpose of EMF’s effort Participants/ modeling approaches Early discussions  Had expected to compare preliminary results but not enough standardization  End-use rather than primary consumption efficiency

3. 3 Models Scrambling to Catch-Up to Policy “Winds” Most models represent climate change policy as a single target. Policymakers do not trust a single economic policy. Nations impose additional goals: renewable standards, energy efficiency targets. Political attraction: reduce gap between target and actual; lower price effects.

4. 4 Lumen-Hours per Kilowatt Hours Astronomical growth in lighting services

5. 5 Policy Climate Raises Interesting Issues How quickly will energy/power demand grow? How much efficiency and at what cost? Do efficiency/price policies complement or substitute?

6. 6 EMF - Communication Bridge Between Modelers and Policymakers Working group adopts common assumptions for different scenarios. Decentralized model simulations at home institutions. Forum meetings compare/contrast key results. Focus on insights for decisions rather than numbers for models.

7. 7 Where We Are in the Process Working group has met twice & revised scenarios once. Will meet again in October in Washington DC. Plan to develop preliminary conclusions for Spring 2010 discussion. Summary report issued soon thereafter.

8. 8 Approaches Offer Different Perspectives Economic-technology models provide considerable detail (EIA, CIMS) Economic-market models represent competition & market interactions (IA climate change models) Both differ from “McKinsey” accounting exercises  More than a technical decision about which equipment  Behavior is often critical  Markets interact, technologies compete & sum < parts

9. 9 EMF 25 Models Brookhaven (US Markal) Brookings Institution (McKibbin-Wilcoxen model) Central Research Institute for Electric Power Industry (Japan) Centre for Energy Policy & Economics, Zurich Charles River Associates CIRED, France (IMACLIM) Joint Global Change Research Institute, U. of Maryland MIT Joint Program on the Science and Policy of Global Change MITRE (MARKAL) Onlocation, Inc. (NEMS-GRPA) Research Triangle Institute (ADAGE) Resources for the Future (HAIKU electricity model) Simon Fraser University (CIMS) University of Maryland Inforum Project (LIFT) US Energy Information Administration (NEMS) First-round results First-round results (technology model)

10. 10 Began With Carbon Fee Scenario Set next year at $30 per tonne CO2 (2007$) Fee (inflation-adjusted) rises by 5% per year Ignored recycling of tax revenues Also considered comparable general energy tax and oil tax scenarios New scenarios will add standards/subsidies (w & w/o carbon fee)

11. 11 Carbon Fee Accelerates Electrification Direct fuel prices rise more than power prices More electrification when policy allows nuclear or other carbon-free sources if they are economical More electrification in Switzerland than in USA More CO2 reductions with carbon than energy or oil tax

12. 12 Price Elasticities: Electricity

13. 13 Price Elasticities: Transportation

14. 14 Next EMF 25 Meeting October 2009 in Washington DC Compare standard/subsidy cases (w & w/o carbon fee) Continued progress on data for energy efficiency cost curves (LBNL & ACEE) & contrast with McKinsey Cross-country differences in energy productivity at a detailed sectoral level for OECD countries (EU-KLEMS database).  1995-2005: 19 countries/40 sectors  1980-2005: 11 countries/30 sectors