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Energy Technology Perspectives (ETP)
MARKAL Model
Audrey Lee, Ph.D.Office of Policy & International Affairs
U.S. Department of Energy
June 8, 2010
NPC Demand Task Group Meeting
Thomas AlfstadBrookhaven National Laboratory
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Outline
MARKAL Framework Model Basics Advantages Analytical Capabilities Model Variants Energy Technology Perspectives (ETP) Model
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MARKAL Framework Well established tool for energy systems analysis.
– 30 years of development under the auspices of the International Energy Agency.
– Approximately 100 user institutions in more than 50 countries.
Bottom-up analysis with explicit technology representation.– Includes physical description of energy technologies.
– Allows for “well-to-wheel” comparison of technologies and technological pathways.
– Studies the impact of technological change/progress on energy markets.
– Provides a technology-rich basis for estimating energy dynamics over a multi-period horizon.
For documentation, publications: http://www.etsap.org
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MARKAL Model Basics Utilizes a bottom-up approach to identify an optimal
technology/resource mix to meet demands in an integrated energy market– Includes a description of the physical energy system with individual
technology representation.
– Technologies are nodes in a flow-based representation of the energy system (Reference Energy System).
– Provides a technology-rich basis for estimating energy dynamics over a multi-period horizon.
– Identifies the most cost-effective pattern of resource use and technology deployment over time.
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The MARKAL objective is to minimize the total cost of the system, discounted over the planning horizon. Each year, the total cost includes the following elements: – Annualized investments in technologies
– Fixed and variable annual operation and maintenance (O&M) costs of technologies
– Cost of exogenous energy and material imports and domestic resource production (e.g., mining)
– Revenue from exogenous energy and material exports
– Fuel and material delivery costs
– Welfare loss resulting from reduced end-use demands
– Taxes and subsidies associated with energy sources, technologies, and emissions
MARKAL Model Basics (Cont.)
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The MARKAL energy economy is made up of producers and consumers of energy carriers. – Assumes perfectly competitive markets for energy carriers
– Producers maximize profits and consumers maximize their collective utility.
– MARKAL computes an inter-temporal partial equilibrium on energy markets
– Quantities and prices of the various fuels and other commodities are in equilibrium, i.e. their prices and quantities in each time period are such that at those prices the suppliers produce exactly the quantities demanded by the consumers
– Total surplus is maximized over the whole horizon
MARKAL Model Basics (Cont.)
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Technology Choice in MARKALTechnology Characteristics Energy Sources Used Efficiency Costs (Capital and O&M) Availability
Energy Resources Cost and Availability
Energy Service Demands By Sector/Region
Other Assumptions Long-Term Discount Rate System Reserve Requirements
Other Constraints Max. CO2 Emissions by Time Period
Dynamic LP Optimization
Technology Mix for Each Time Period
That Satisfies Energy Demand Given
Constraints
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MARKAL Building Blocks: The Reference Energy System
BiofuelsProduction
Industry
Residential/commercial
Electricityproduction
Refineries
Transport
HeatingCoolingPower
Movingetc.
GasolineNatural gasElectricity
CokeBiofuels
Heatetc.
Renewables
Fossil fuels
Nuclear
Usefulenergy
Primary energy
Conversion sectors/processes
Finalenergy
Demandsectors/processes
Coke ovens
Heatproduction
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Advantages of MARKAL Framework Flexible and transparent framework
– Methodology is well documented.– Model structure and technologies and fuel pathways can easily be added,
changed or deleted, while remaining consistent with the underlying methodology.
– Model structure can be applied to different levels of geographical coverage (i.e., city/state, national and global models).
Framework allows use of different features depending on modeling needs, – User can run the model myopically or with perfect foresight, with
endogenous learning, elastic demands, etc.– Material flows (i.e., spent reactor fuel or water requirements) can be
modeled.– Uncertainty can be examined
Run times are modest
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Examples of MARKAL Analytical Capabilities Technology evaluation
– Evaluate new technologies and priorities for R&D – Identify least-cost energy systems– Identify necessary characteristics for a technology to penetrate the
marketplace – Perform prospective analysis of long-term energy balances under
different scenarios– Analyze the structure and impacts of establishing a new energy
infrastructure Policy analysis
– Analyze the impacts of a policy on the integrated energy, environmental, economic system: e.g., carbon cap-and-trade system.
– Identify selected pathways to achieve a policy goal, such as reduced dependence on foreign oil
– Evaluate the effects of regulations, taxes and subsidies
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Examples of Analytical Capabilities (cont.) Environmental Planning
– Identify cost-effective responses to restrictions on emissions– Project inventories of greenhouse gas emissions
Regional Analysis– Estimate the value of regional cooperation
» Local energy planning (NYC, European and Asian cities)» Multi-state planning (NESCAUM, census region MARKAL)» National (50+ countries, 120 institutions)» Global (ETP, SAGE)» Examine energy flows between regions
Material Flows– Inter-connection of energy use and water availability– Complete nuclear fuel cycle– Solid waste– Industrial materials flows
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Variants of MARKAL The MARKAL code is flexible and allows the user to run the
model with many different combinations of features. The user can select one primary variant and different combinations of the secondary variants.
Primary Variants: Standard MARKAL: Linear program with demands defined
exogenously. MARKAL-MACRO: Standard MARKAL linked to a macro-
economic growth model with demands determined endogenously.
MARKAL Elastic Demand (MED): Demand is price responsive and determined endogenously.
TIMES: New generation MARKAL type model with additional features such as flexible time periods.
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Variants of MARKAL (Cont.)Secondary Variants: Endogenous Technology Learning (ETL): Technology costs
change with cumulative experience. Multi Region: Allows solution of multi-region models Stochastic MARKAL: Expected outcome is generated as a
result of assumed “states of nature”, defined by the analyst. MARKAL-EV: Environmental damage estimates included in
the MARKAL objective function. SAGE: Time-stepped, period by period solving of MARKAL or
MARKAL Elastic Demand (MED). MARKAL-GP: Goal programming formulation used to examine
the impacts of weighting environmental vs. economic goals.
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Energy Technology Perspectives (ETP) Model
Global Analysis of Energy Technologies Captures global energy trade flows and manufacturing
constraints. Example: global biofuels production, trade, and consumption
ETP Overview Based on the MARKAL framework Global technology database State-of-the-art energy technology information Covers the period 2000-2050 15 linked world regions Region-specific technology constraints and costs.
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ETP MARKAL Model – 15 Regions
IEA regions• U.S. • Canada• Japan• New Zealand,
Australia• IEA-Europe• South Korea
Non-IEA regions•E. Europe•FSU•China•India•Rest of Asia •Latin America•Mexico•Africa •Middle East
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Diesel
ETP MARKAL Technology DetailExample: LDV Transport Demand
ICE Car
Advanced ICE Car
Diesel Hybrid
Gasoline Hybrid
Diesel ICE Car
Plug-in Hybrid
H2 Fuel Cell Vehicle
LDV transport demand [vehicle miles]
Ups
trea
m f
uel
proc
essi
ng
Gasoline
ElectricityGasoline
Hydrogen
Note: List is for illustrative purposes. The full ETP and US MARKAL models contain a wider range of vehicles
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Also used to help develop:• IEA World Energy Outlook• Mobility 2030: Meeting the Challenges of Sustainability
• (World Business Council for Sustainable Development, 2004)• Transport, Energy and CO2: Moving towards sustainability
• Horizon 2050, all energy sources• Builds and expands the work done on ETP
Publications Based on the ETP Model
Prospects for Hydrogen and Fuel Cells (IEA, 2005) Energy Technology Perspectives 2008
Prospects for CO2 Capture and Storage (IEA, 2004)
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Thank you!
Audrey Lee, Ph.D.
Office of Policy and International Affairs
U.S. Department of Energy
202 586 7039
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Ten Region U.S. MARKAL Model
Key Regional Differences– Fossil fuel and renewable resource availability– Economic and population growth rates– End-use demand patterns and levels of energy intensity– Energy infrastructure and transportation options and costs– Policies and regulations
Calibrated to Energy Information Administration’s Annual Energy Outlook
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AZ
CA
Pacific
California
Mountain
Mountain
West North Central
West South Central
East South Central
South Atlantic
Middle Atlantic
New EnglandEast North Central
Ten Region U.S. MARKAL Model
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U.S. MARKAL Model: Data
Reference Case: EIA Data – Annual Energy Outlook (AEO)– Annual Energy Review (AER)
Region Specific Data in the Ten Region U.S. Model Fossil fuel resource costs, availability (same data used by
EIA for NEMS) Wind and solar potential (NREL) Biomass supply curves (EIA, Marie Walsh, Univ. of Tenn.) Carbon sequestration potential (EEA/ICF) Electricity infrastructure (FERC, EIA) Taxes, policies (EIA, other analyses)
DOE Technology Goals– Program Offices, National Labs– GPRA analysis