Navius’ Integrated Electricity Supply and Demand (IESD) model simulates capacity investment and hourly dispatch decisions in the electricity sector as well as the decisions by end-users that affect electricity demand. This tool allows us to provide insight into the impact of policies and economic conditions on:
- Electricity consumption by sector
- Capacity and electricity generation by unit and fuel type
- Greenhouse gas emissions from the electricity sector
- Greenhouse gas abatement due to electricity conservation and/or electrification in the rest of the economy
- Wholesale electricity prices
Integrating electricity supply and demand
IESD is effectively two separate models – one that simulates capacity and hourly dispatch decisions in the electricity sector and another that simulates investment in electricity consuming technologies. For each simulated year, the supply and demand models run iteratively until they converge. This process is repeated over multiple years to show the long-term impact of capacity additions (supply model) and technology choices (demand model). For an even more comprehensive analysis, IESD can be linked with gTech.
Integrating electricity supply and demand: an example
A growing population or economy can increase demand for electricity (represented by the demand model). In response, electricity supply is increased (represented by the supply model). However, this increase may affect the price of electricity, which in turn may influence demand (e.g. higher prices will incentivize greater energy efficiency).
By integrating electricity supply and demand, we can also analyze the impact of smart-grid technologies. For example, how might coordinating electricity demand with renewable electricity generation facilitate greenhouse gas reductions?