Beyond the horizon: Recent directions in long-term energy modeling

Extending time horizons for energy analysis increases both the cumulative effect of gradual structural changes and the likelihood of revolutionary innovations, on scales ranging from individual end-use sectors or regions to the entire global economy. Distinguishing features of long-term modeling therefore include technological change (e.g., new technologies or factor substitution), shifts in energy supply (due to exhaustion of conventional sources or the emergence of new sources), and dynamic energy-economy interactions (the impact of growth on energy demand and simultaneous role of the energy sector in determining growth paths). A taxonomy of model types including computable general equilibrium (CGE), aggregate optimization, and energy-sector models can be defined based on their scope of coverage (partial vs general equilibrium) and behavioral outlook (simulation vs optimization). This paper identifies the motivation and key attributes of each model type with reference to several particular specifications.