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Energy Policy Modeling in the 21st Century PDF

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Understanding Complex Systems FoundingEditor Prof.Dr.J.A.ScottKelso CenterforComplexSystems&BrainSciences FloridaAtlanticUniversity BocaRatonFL,USA E-mail:[email protected] EditorialandProgrammeAdvisoryBoard HenryAbarbanel Department of Physics and Marine Physical Laboratory (Scripps Institution of Oceanography), UniversityofCalifornia,SanDiego,LaJolla,CA92903,USA DanBraha NewEnglandComplexSystems,InstituteandUniversityofMassachusetts,Dartmouth PéterÉrdi Center for Complex Systems Studies, Kalamazoo College, USA and Hungarian Academy of Sciences,Budapest,Hungary KarlFriston InstituteofCognitiveNeuroscience,UniversityCollegeLondon,London,UK HermannHaken CenterofSynergetics,UniversityofStuttgart,Stuttgart,Germany ViktorJirsa CentreNationaldelaRechercheScientifique(CNRS),UniversitédelaMéditerranée,Marseille, France JanuszKacprzyk SystemResearch,PolishAcademyofSciences,Warsaw,Poland KunihikoKaneko ResearchCenterforComplexSystemsBiology,TheUniversityofTokyo,Tokyo,Japan ScottKelso CenterforComplexSystemsandBrainSciences,FloridaAtlanticUniversity,BocaRaton,USA MarkusKirkilionis MathematicsInstituteandCentreforComplexSystems,UniversityofWarwick,Coventry,UK JürgenKurths PotsdamInstituteforClimateImpactResearch(PIK),Potsdam,Germany AndrzejNowak DepartmentofPsychology,WarsawUniversity,Poland LindaReichl CenterforComplexQuantumSystems,UniversityofTexas,Austin,USA PeterSchuster TheoreticalChemistryandStructuralBiology,UniversityofVienna,Vienna,Austria FrankSchweitzer SystemDesign,ETHZürich,Zürich,Switzerland DidierSornette EntrepreneurialRisk,ETHZürich,Zürich,Switzerland StefanThurner MedicalUniversityofVienna,Vienna,Austria Forfurthervolumes: http://www.springer.com/series/5394 Understanding Complex Systems Futurescientificandtechnologicaldevelopmentsinmanyfieldswillnecessarilydependuponcoming togripswithcomplexsystems.Suchsystemsarecomplexinboththeircomposition—typicallymany different kinds of components interacting simultaneously and nonlinearly with each other and their environmentsonmultiplelevels—andintherichdiversityofbehaviorofwhichtheyarecapable. TheSpringerSeriesinUnderstandingComplexSystemsseries(UCS)promotesnewstrategiesand paradigmsforunderstandingandrealizingapplicationsofcomplexsystemsresearchinawidevariety offieldsandendeavors.UCSisexplicitlytransdisciplinary.Ithasthreemaingoals:First,toelaborate theconcepts, methods, andtoolsofcomplexsystemsatalllevelsofdescriptionandinallscientific fields,especiallynewlyemergingareaswithinthelife,social,behavioral,economic,neuro,andcognitive sciences(andderivativesthereof);second,toencouragenovelapplicationsoftheseideasinvariousfields ofengineeringandcomputationsuchasrobotics,nano-technology,andinformatics;third,toprovidea singleforumwithinwhichcommonalitiesanddifferencesintheworkingsofcomplexsystemsmaybe discerned,henceleadingtodeeperinsightandunderstanding. UCSwillpublishmonographs,lecturenotes,andselectededitedcontributionsaimedatcommunicat- ingnewfindingstoalargemultidisciplinaryaudience. Springer Complexity SpringerComplexityisaninterdisciplinaryprogrampublishingthebestresearchandacademic-level teachingonbothfundamentalandappliedaspectsofcomplexsystems—cuttingacrossalltraditional disciplinesofthenaturalandlifesciences,engineering,economics,medicine,neuroscience,social,and computerscience. ComplexSystemsaresystemsthatcomprisemanyinteractingpartswiththeabilitytogenerateanew qualityofmacroscopiccollectivebehaviorthemanifestationsofwhicharethespontaneousformation ofdistinctivetemporal, spatial, orfunctionalstructures. Modelsofsuchsystemscanbesuccessfully mappedontoquitediverse“real-life”situationsliketheclimate, thecoherentemissionoflightfrom lasers,chemicalreaction-diffusionsystems,biologicalcellularnetworks,thedynamicsofstockmarkets andoftheinternet,earthquakestatisticsandprediction,freewaytraffic,thehumanbrain,ortheformation ofopinionsinsocialsystems,tonamejustsomeofthepopularapplications. Althoughtheirscopeandmethodologiesoverlapsomewhat,onecandistinguishthefollowingmain conceptsandtools:self-organization,nonlineardynamics,synergetics,turbulence,dynamicalsystems, catastrophes,instabilities,stochasticprocesses,chaos,graphsandnetworks,cellularautomata,adaptive systems,geneticalgorithms,andcomputationalintelligence. ThetwomajorbookpublicationplatformsoftheSpringerComplexityprogramarethemonograph series“UnderstandingComplexSystems”focusingonthevariousapplicationsofcomplexity,andthe “SpringerSeriesinSynergetics”, whichisdevotedtothequantitativetheoreticalandmethodological foundations.Inadditiontothebooksinthesetwocoreseries,theprogramalsoincorporatesindividual titlesrangingfromtextbookstomajorreferenceworks. Hassan Qudrat-Ullah Editor Energy Policy Modeling in the 21st Century 2123 Editor HassanQudrat-Ullah SchoolofAdministrativeStudies YorkUniversity Toronto Canada ISSN1860-0832 ISSN1860-0840(electronic) ISBN978-1-4614-8605-3 ISBN978-1-4614-8606-0(eBook) DOI10.1007/978-1-4614-8606-0 SpringerNewYorkHeidelbergDordrechtLondon LibraryofCongressControlNumber:2013950223 © SpringerScience+BusinessMediaNewYork2013 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher, whetherthewholeorpart of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped.Exemptedfromthislegalreservationarebriefexcerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. DuplicationofthispublicationorpartsthereofispermittedonlyundertheprovisionsoftheCopyright LawofthePublisher’slocation,initscurrentversion,andpermissionforusemustalwaysbeobtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center.ViolationsareliabletoprosecutionundertherespectiveCopyrightLaw. Theuseofgeneraldescriptivenames,registerednames,trademarks,servicemarks,etc.inthispublication doesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfromtherelevant protectivelawsandregulationsandthereforefreeforgeneraluse. While the advice and information in this book are believed to be true and accurate at the date of publication,neithertheauthorsnortheeditorsnorthepublishercanacceptanylegalresponsibilityfor anyerrorsoromissionsthatmaybemade.Thepublishermakesnowarranty,expressorimplied,with respecttothematerialcontainedherein. Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) Thisbookisdedicatedtoalltheprophets, fromAdam (peacebeuponhim)to Muhammad (peacebeuponhim),andtoall thosehumanbeingswhodidandaredoing theirbestinbringinghumanityfromthedeep darknesstothebeckoningpathofandforlife inthisworld. Preface and Acknowledgements Decision making in energy systems is a complex task at best. Complexity stems primarilyfromthenonlinearnatureofenergy–economy–environmentinteractions. Giventheglobaltrendoffocusingonlowcarboneconomies,energypolicydesign andassessmenthasbecomeadynamicproblem.Uncertaintiessuchasthedynamics ofenergysupplyanddemand,thepriceoffossilfuels,variousregulatoryregimes,the advancesandchallengesofenergyproductionandconsumption-relatedtechnologies, andimpactofenergyrelatedemissionsabound.Therefore,theuseofmodel-based analysisandscenariosinenergypolicydesignandassessmenthasseenphenomenal growthduringthepastseveraldecades. Theprimaryaimofthisbookistodisseminatetherolesandapplicationsofvarious modeling approaches aimed at improving the usefulness of energy policy models in public decision making. The key focus is on the development, validation, and applicationsofsystemdynamicsandagent-basedmodelsinserviceofenergypolicy design and assessment in the twenty-first century. Invitations were sent all around theglobe.Severalrenownedauthorswerealsospeciallyinvitedtocontribute.Each prospectivecontributorwasinitiallyaskedtoprepareatwotothreepageproposal. Theseproposalswerereviewedbytheeditorandsuggestionsweremadetoprepare thefullpapers.Thesubmittedpaperswerethenreviewedbyindependentreviewer panels. Each panel consisted of three members—the editor and two independent expertsinthefield.Thefinalacceptance/rejectiondecisionsweremadebytheeditor basedontherevisedpaperssubmittedbythecontributors. Thebookcontainsthreeparts.PartI,“EnergyPolicyModelingforthe21stCen- tury:AnIntroduction”hasonechapter.Itintroduceskeyaspectsofmajormodeling approaches and presents an overview of all the chapters of this book. Part II of the book, “Modeling Approaches and Energy Policy Decisions”, consists of six chaptersanddealswiththerangeoftools, methods, andtechnologiesthatsupport decisionmakingincomplex,dynamicenergysystemsincludingThinkingaboutthe Future:SystemDynamicsandtheProcessofElectricityDeregulation,FuzzySystem Dynamics:AFrameworkforModelingRenewableEnergyPolicies,TheDiffusion ofEco-Technologies:AModel-BasedTheory, ManagingtheEnergyBasketinthe Face of Limits, Power Plant Relocation Policy versus Investments in Transmis- sionNetworkInfrastructure:aStudyontheItalianEnergyMarket,andSimulation vii viii PrefaceandAcknowledgements of Greenhouse Gas Cap-and-Trade Systems with ENERGY 2020. Part III of the book, “System Dynamics andAgent-Based Models inActions”, has six chapters andprovidestheempiricalevidencetotheapplicationofbothsystemdynamicsand agent-based modeling approaches to energy policy design and assessment issues includingEnergyPolicyPlanningforClimateResilientLow-CarbonDevelopment, UnderstandingtheDynamicsofElectricitySupplyandDemandinOntario,Adop- tion of Renewable Energy Technologies: A Fuzzy System Dynamics Perspective, Resurrecting a Forgotten Model: Updating Mashayekhi’s Model of Iranian Eco- nomic Development, Making Progress Towards Emissions Mitigation: Modeling Low-carbonPowerGenerationPolicy,andExploringEnergyandEconomicFutures usingAgent-basedModelingandScenarioDiscovery. Wearegratefultotheauthorsofthevariouschaptersfortheircontributions.Ithad beenabitlongprocessfromtheinitialoutlinestodevelopingthefullchaptersand thenrevisingtheminthelightofreviewers’comments.Wesincerelyacknowledge theauthors’willingnesstogothroughthisprocess.Wealsoacknowledgethework andknowledgeofthemembersofourreviewpanels,manyofwhichhadtobedone atshortnotice. ThankstoallthepeopleatSpringer, USAespeciallyChristopher, HoYing, and Brianwithwhomwecorrespondedfortheiradviceandfacilitationintheproduction ofthisbook. Mrs. Puja Kumari, Crest Premedia Solutions (P) Ltd. prepared a camera-ready copyofthemanuscriptwithherusualprofessionalismandcooperationandwewish torecordourthankstoher. Finally,Iamgratefultomyfamily,Tahira(forherincredibleandselflesssupport allthetime),Anam(forherprofessionalproofreadingandspiritualperspectiveon thingsaroundus),Ali(forsparingtimefromhiskingdom),Umer(forhisoccasional smiles on my work and his work too), Umael (for bearing with me on Writing Assignments, and rollerblades stuff), and my father, Safdar Khan and my mother, Fazeelat Begum (for their sacrifice, support, and prayers all along)—all the very source of my inspiration and desire to embark on this journey. It would be unfair nottoacknowledgetheconstantandconsistentprayersandcaressheextendstome, SairaBano,mymother-in-law. Toronto,Canada HassanQudrat-Ullah July,2013 Contents PartI EnergyPolicyModelinginTwenty-FirstCentury:AnIntroduction EnergyPolicyModelinginthe21stCentury:AnIntroduction .......... 3 HassanQudrat-Ullah PartII ModelingApproachesandEnergyPolicyDecisions ThinkingAbouttheFuture ......................................... 17 ErikR.LarsenandSantiagoArango FuzzySystemDynamics:AFrameworkforModelingRenewable EnergyPolicies.................................................... 31 MichaelMutingiandCharlesMbohwa TheDiffusionofEco-Technologies:AModel-BasedTheory............. 49 MatthiasOttoMüller,RuthKaufmann-Hayoz,MarkusSchwaninger andSilviaUlli-Beer ManagingtheEnergyBasketintheFaceofLimits .................... 69 KhalidSaeed PowerPlantRelocationPolicyversusInvestmentsinTransmission NetworkInfrastructure:AStudyontheItalianEnergyMarket......... 87 SilvanoCincottiandGiuliaGallo SimulationofGreenhouseGasCap-and-TradeSystems withENERGY2020 ............................................... 107 JeffreyS.Amlin PartIII SystemDynamicsandAgent-BasedModelsinAction EnergyPolicyPlanningforClimate-ResilientLow-CarbonDevelopment 125 AndreaM.Bassi,Prakash(Sanju)DeenapanrayandPålDavidsen ix x Contents UnderstandingtheDynamicsofElectricitySupplyandDemand inCanada ........................................................ 157 HassanQudrat-Ullah AdoptionofRenewableEnergyTechnologies:AFuzzySystem DynamicsPerspective.............................................. 175 MichaelMutingi ResurrectingaForgottenModel:UpdatingMashayekhi’sModel ofIranianEconomicDevelopment................................... 197 SaeedP.LangarudiandMichaelJ.Radzicki MakingProgressTowardsEmissionsMitigation:Modeling Low-CarbonPowerGenerationPolicy............................... 235 IsaacDyner,CarlosJ.FrancoandLauraM.Cardenas ExploringEnergyandEconomicFuturesUsingAgent-BasedModeling andScenarioDiscovery ............................................ 251 P.Wang,M.D.GerstandM.E.Borsuk Index ............................................................ 271

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