Targets IMage Energy Regional (TIMER) Model, Technical ...

page 30 of 188 RIVM report 461502024
determined either by an exogenous time-series of annual decline percentages or, as part of a
learning-by-doing process, related to the cumulated conservation investments. Note that 0 <
EEopt < CC max and that EEopt is the factor with which UED is to be multiplied to get the
optimal UED. Formula 3.9 can be rewritten into an expression for the marginal investment
costs IC marg (Vries, 1995):
,&
P arg
= &&6
UVL
*&&,
UVL
*
−2
[(1
− ) −1] && max
UVL
ζ $/GJ saved (3.10)
Here, ζ is the degree to which the maximum has been achieved, EEopt/CCmax. If ζ−> 1 then
IC marg −> oo and if ζ−> 0 then IC marg −> 0. The factor CCS*CCI/ CC max can be interpreted as
the total investment costs associated with a reduction of the energy intensity with a factor (V5 -
1)/2 ~ 0.62 for CC max = 0.9. Thus, a rule of thumb is that the choice of CCS*CCI/ CC max
indicates the level of the average investment costs per GJ saved at which a total reduction in
energy-intensity of 62 % is realised. Chapter 9 illustrates these equations in more detail.
Two things should be noted here. In our implementation, we assume that all regions have the
same (sectoral) conservation cost curve in terms of CCS and CC max . We then use historical
energy prices and assumed payback times to normalise this curve for each region in such a way
that in each region the conservation cost curve has its origin at the point where no additional
energy efficiency measures are taken (PIEEI = 0). In this way the simulation reflects the
phenomenon of differences in marginal costs of energy conservation.
Secondly, our formulation implies the use of a price-elasticity which depends on the degree of
conservation c.q. the energy cost and on time. The price-elasticity is defined as the ratio of
percentage change in energy use before and after PIEEI and the percentage change in energy
costs CostUE. This formulation implies a price-elasticity tending towards zero if a large share
of the maximum conservation is implemented, reflecting the phenomenon that price changes
induce less conservation investments once the cheapest options are introduced.
After a fuel or electricity price change, the effect of conservation investments is only applied
for new capital equipment. Although many energy conservation investments will have a
retrofit-character, we account for a diffusion period of price-induced energy savings: in a period
of declining end-use energy prices, the model generates a slowly declining PIEEI to represent
gradually less effective energy management practices. In formula form:
3,((,
,
W UVL
=
3,((,
−1,
W
UVL
* 2OG&DS
2OG&DS
W UVL
,
,
W UVL
+ ((RSW
W UVL
+ 1HZ&DS
,
,
* 1HZ&DS
W UVL
,
W UVL
- (3.11)
with EEopt the previously defined factor with which the energy-intensity of newly installed
capital goods (factories, dwellings, offices, cars, etc.) has declined because of a rise in fuel or
electricity prices. OldCap and NewCap are calculated as in the previous formula for the AvInt.
For model calibration, the key parameter is the steepness of the conservation cost curve, CCS.
The empirical basis for the conservation investment cost curve which represents the cumulative
investments as a function of the price-induced reduction in energy intensity, consists of the
curves published in the literature over the past 15 years (Vries, 1995; Beer, 1994; Blok, 1990;