The National Energy Modeling System: The Next Steps Forward

1
The National Energy Modeling SystemThe Next
Steps Forward

• Susan H. Holte
• Technical Assistant to the Administrator and
  Deputy Administrator

2
Purpose of Project

• Solicit input from stakeholders on modeling and
  analytic issues related to NEMS
• Identify and prioritize model development and
  analytical projects for the Fiscal Years 2008 and
  2009 budget cycles
• Initiate research projects, as appropriate

3
Team Members

• Susan Holte - leader
• Bill Helkie
• Jeff Jones
• Andy Kydes
• Dan Skelly

4
NEMS Development in the Early 1990s - Initial
Steps

• Much publicity due to the National Energy
  Strategy
• National Academy of Sciences study initiated by
  the Office of Policy, Planning and Analysis
• New NEMS Project Office formed in EIA within the
  Office of the Administrator in order to research
  and evaluate models and plan the design and
  implementation of NEMS

5
NEMS Development in the Early 1990s - Next Steps

• Office of Integrated Analysis and Forecasting
  created in October 1991
• New system design papers prepared
• Component design reports prepared for each module
  and submodule
• Working groups created for each module

6
Fifteen Years Later A Different Process

• EIA has an Office with lead responsibility for
  the modeling and analysis the Office of
  Integrated Analysis and Forecasting
• EIA has a working and functional model for many
  analytical needs
• It is probably unnecessary and impractical to
  erase the blackboard clean the expected cost
  and time would be large

7
The Evolution of NEMS to Date

• Many significant changes beyond routine data
  updates and time horizon extensions
• Just a few of a very long list
• Restructuring of the electricity and natural gas
  industries
• Mercury removal technology
• Greenhouse gas limits or prices
• Technology learning
• New gasoline and distillate particulate and
  emission standards
• Technological detail for industrial cogeneration
  and electric motors
• Integration of the entire Global Insight
  macroeconomic model
• Representation of ethanol, coal-to-liquids, and
  gas-to-liquids
• Many regulatory changes such as the Energy Policy
  Act of 2005 and appliance standards

8
Initial Outreach Efforts

• Meetings with interested parties in the
  Department
• Higher interest relative to the early 1990s,
  partly due to the Government Performance and
  Results Act
• Inquiries sent to Congressional staff members
• Letters sent to energy trade and research
  organizations
• Inquiries sent to National Laboratories
• Solicited input from the OIAF modelers

9
Interest Varies throughout DOE

• Energy Efficiency and Renewable Energy
• Fossil Energy
• Electricity Delivery and Energy Reliability
• Nuclear Energy
• Policy and International Affairs
• Science

10
General Feedback from the Department

• To Dream the Impossible Dream
• Extend the horizon to 2050 or later
• Add significant technological and program detail
• Enhance integration of U.S. energy markets with
  both the macroeconomy and world markets
• Add representations of energy infrastructure
• Drill down dynamically to more regional detail
• Add uncertainty analysis and stochastic scenarios
• Add automatic diagnostics
• Add transparency
• And by the way, solve in less than one hour

11
Some Broad Issues Under Consideration

• Model horizon to 2050 or later for Departmental
  use
• Enhancement of the feedbacks with the
  macroeconomic model
• Treatment of infrastructure
• Treatment of technological choice throughout the
  model
• Consumer choice and foresight

12
Some Specific Modeling Topics

• Hydrogen markets
• Improved representation of world energy markets
• Offshore wind
• Transmission
• Solution time

13
General Feedback Related to NEMS

• Transparency
• Equitable treatment of technologies
• Policies and programs that cannot be represented
  in NEMS
• Outreach

14
Next Steps

• Expect further discussions with DOE and external
  stakeholders on projects and priorities
• Review and vetting of projects process to be
  determined
• Initiated review and redesign of several NEMS
  modules in FY06 and proposed for FY07 and the
  implementation will depend on funding
• Expect to initiate review on technology choice by
  sector and foresight used in consumer
  decisionmaking in the Spring of 2007
• Additional module reviews to be done in priority
  order and as funds become available
• Initiated testing of alternative optimization
  software